Quick Revision Notes Companies Ordinance 1984 (1-262)
Atif Abidi www.canotes.net
PREFACE The Examinations of ICAP are a demanding test of student’s ability to master the wide range of knowledge and skills required of the modern professionals. Subject of “Company Law” is one of the efforts made by ICAP in this context for enhancing student’s knowledge about detailed overview of corporate laws prevailing in Pakistan. The best and most recommended source for this subject is “Companies Ordinance 1984”. The basic problems faced by the students is that the Companies Ordinance 1984 is sometimes too difficult to understand or too lengthy to digest & revise at final prep for the ICAP Exam. There are also more than 30 books compiled by different authors across Pakistan for this subject (More famous books are “notes by PAC” and “notes by Petiwala”. These books serves the purpose in easy language but ignoring the fact that all sections are important in the eye of ICAP examiner. Hence these books omit many sections, subsections, clauses and provisio. For these reasons there arise needs to have some comprehensive and easy notes for this subject that shall be serving both purposes Completeness of Companies Ordinance 1984 Smartness and easiness of the notes book For this purpose after the continues efforts of 2 years, I am being able to develop these notes as being quick revision summaries of Companies Ordinance 1984 covering each and every section, sub-section, clauses, sub-clauses, provisio and explanations. The notes contain all sections presented in bullets form making it easy to remember and cram the points (just like ICAP examiner wants). How To use: It is strongly recommended that first of all you should thoroughly read from the Companies Ordinance or from the notes book you are consulting. Then you may either consult these notes as guideline for preparation of your own notes or you may select these notes for your revision, It’s totally upto you. These notes are not meant for first source (These are for revision purposes) I have tried to ensure completeness in these notes and have made amendments on the basis of feedback from my students of company law in last 3 sessions. However human error is expected in these notes, so if you find anything missing or some spell / logical mistakes in these notes please mail me about such errors by referring to the section number at my mail id “
[email protected]“. In most cases fines & penalties are not incorporated in these notes. Moreover sub-sections that were transitional and relevant only for 6 month after coming Companies Ordinance 1984 in force are skipped. I am especially thankful to my colleagues for effective coordination in making of these notes Hope these notes could serve you. May ALLAH bless all of you with success in every exam of both lives. Please also remember me in your prayers Atif Abidi www.canotes.net August 11, 2012
For notes & other study material for ICAP subjects www.canotes.net
Sec
Section Title
Quick Revision of the Section
PRELIMINARY 1
Short title, extent and commencement
3
Meaning of subsidiary and holding company
-
Name: Companies Ordinance 1984 Extends to Whole Pakistan
One Co
is subsidiary of other Co, if that other Co Directly/indirectly controls or holds >50% of its voting securities Has power to elect and appoint >50% of its directors; or Is holding of its holding Co
(50% holding condition not applicable to CDC)
4
Ordinance not to apply to certain corporations
5
Application of ordinance to nontrading companies with purely provincial objects
Powers conferred by this Ordinance on FG or SECP shall, in relation to companies which are not trading corporations (confined to single Province), be the powers of the Provincial Government.
6
Ordinance to override memorandum, articles, etc.
Hierarchical series: Ord.>MOA>AOA>Agreement>Resolution.
Trading corporation owned/controlled by Province (business only within that Province) Co-operative society University.
JURISDICTION OF COURTS 7
Jurisdiction of courts
- High Court having Jurisdiction over place of registered office - FG may empower any civil court to exercise powers - For w/up place which was reg. office of Co for longest duration during preceding 6months. Nothing in this section shall invalidate proceeding taken in Court other than High Court or civil court
8
Constitution of company benches
9
Procedure of the court
One or more by company benches constituted by Chief Justice of High Court. -
Day to day hearing (As expeditiously as possible) Final judgment not later than 90 days from petition Adjourned not for > 14 days at one time or > 30 days in total.
10
Appeals against court orders
-
Appeal to Supreme Court If Co ordered to be wound up has Capital < 1 Million; Appeal shall lie only if supreme court grants leave to appeal (in other cases no approval required). Judgment within 90 days of appeal.
-
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN 12
Powers and functions of the commission
-
Such Functions as conferred by this ordinance FG may authorize SECP to exercise some of its powers (with limitations/conditions)
13
Reference by federal government or commission to the court
-
FG of SECP may refer to court for any matter/question regarding affairs of Co Court may make just & Equitable order on such reference
INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO 14
Obligation to register certain associations, partnerships, etc, as companies
-
No association/partnership/company of >20 persons shall be formed for carrying on any business without registration as Co under Ordinance. All Liable person -----Fine = 5000 + personally liable for all liabilities incurred
-
Exceptions any society, body or association, other than a partnership, formed or incorporated under any other Pakistan law; or a joint family carrying on joint family business; or a partnership of two or more joint families where the total number of members of such families, excluding the minor members, does not exceed twenty; or a partnership formed to carry on practice as lawyers, accountants or any other profession where practice as limited liability Co not permitted under relevant laws / regulations
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
MEMORANDUM OF ASSOCIATION 15
Mode of forming a company
16
Memorandum of company limited by shares
-
Subscribe to MOA & comply with requirements. Min Members (Public = 3, Private = 2, SMC = 1) May be Limited by shares, guarantee or unlimited.
Contents of MOA Name of Co with Last word ("limited" for public & "(Private) Limited" for private) Reg.Office (Province/part of Pakistan not forming part of Province) Objects of Co and territories to which they extend (except in the case of a trading Co.) Liability of the members is limited; and Amount of share capital and division into shares of a fixed amount - No subscriber of the memorandum shall take less than one share; and - Each subscriber shall write opposite to his name number of shares he takes. Single Member Companies Rules 2003 Single Member Companies should have last words “(SMC Private) Limited”
17
Memorandum of company limited by guarantee
Contents of MOA Name of Co with Last word "(Guarentee) Limited Reg.Office (Province/part of Pakistan not forming part of Province) Objects of Co and territories to which they extend (except in the case of a trading Co.) Liability of the members is limited; and Amount each member undertake to contribute in winding up (not > specific amount) Additional Contents (if Co also has a share capital) Amount of share capital and division into shares of a fixed amount No subscriber of the memorandum shall take less than one share; and Each subscriber shall write opposite to his name number of shares he takes.
18
Memorandum of unlimited company
Contents of MOA Name of Co Reg.Office (Province/part of Pakistan not forming part of Province) objects of Co and territories to which they extend (except in the case of a trading Co.) If Co has share capital - No subscriber of the memorandum shall take less than one share; and - Each subscriber shall write opposite to his name number of shares he takes.
19
Printing, signature, etc. of memorandum
Printed, divided into paragraph numbered consecutively, signed by subscribers, dated (Deemed power to borrow and issue non interest bearing securities to financial institutions) > In addition to the general particulars to be added on signing MOA a subscriber shall specify his NIC number or his passport number in the case of foreign national Provided that in case of a person other than a natural person, the address of its registered office or principal office shall be specified and the authorized representative signing the documents shall also add his particulars as stated in this rule
20
Restriction on alteration of memorandum
Cannot be altered, except to the cases, mode & extent provided in Ord.
21
Alteration of Memorandum
** By special resolution alter the registered office or objects clause to enable it to: Carry on its business more economically/efficiently Attain its main purpose by new or improved means Enlarge or change the local area of its operations Carry on some business, not being a business specified in its MOA, in addition to existing Restrict or abandon any of the objects specified in the MOA Sell or dispose of the whole or any part of the undertaking of Co Amalgamate with any other company or body of persons. ** Confirmation by the SECP on petition required: (No confirmation required if moving from Punjab to Islamabad Capital Territory or vice verca) ** Before confirming SECP must be satisfied that Sufficient notice given to every holder of debentures & persons whose interest will be affected Consent of Every creditor, entitled to object (and signifies his objection in manner directed by SECP) has been obtained or his debt or claim has been discharged or secured > Application for confirmation of alteration be submitted to SECP by a responsible officer not later than 60 days from date of special resolution. Application shall contain following information correct as on the day immediately preceding date of special resolution and signed by a responsible officer
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section Name and address of company; Number and date of incorporation; Subscribed and paid-up capital; Redeemable capital; Business actually being carried on and the clause in the memorandum justifying it Reasons for the proposed alteration Following documents correct as on day immediately preceding date of special resolution and certified by responsible officer shall be submitted with application A copy of memorandum and the articles; A copy of special resolution; Minutes of meeting at which special resolution was adopted; Particulars of dissenting shareholders or creditors together with their objections; A copy of the latest audited balance sheet; Statement in comparative form showing existing provisions of memorandum as are proposed to be altered and the provisions as would appear after the proposed alterations have been made, indicating the reason for change Pattern of holding of its shares in Form 34; Names and addresses of each of its creditors to whom an amount exceeding 50,000 rupees is due with the amount mentioned against each along with their consent to alteration; and Names and addresses of the persons likely to be affected along with their consent to the alteration
22
Power of commission when confirming alteration
Either wholly or in part, on such terms & conditions deemed appropriate by commission.
23
Exercise of discretion by commission
SECP may adjourn the proceedings of alteration so that an arrangement may be made for the purchase of the interests of dissident members. (No part of the capital of Co may be expended in such purchase.)
24
Procedure on confirmation of the alteration
25
Effect of failure to register within 90 days
Certified copy of order of SECP + altered MOA filed with registrar for registration Within 90 days of passing of order by SECP. The registrar shall register and shall certify the registration under his hand. Certificate shall be conclusive evidence that all requirements complied Extension (in 90 days) may be granted by SECP.
- Alteration become null & void if order of SECP not filed within 90 days (or extended time). - Application for revival order may be filed within further 90days.
ARTICLES OF ASSOCIATION 26
Registration of Articles
27
Printing, signature, etc., of articles
Ltd. By shares may adopt Table A; Mandatory for others to register AOA with MOA For Guarantee Ltd. Or Unlimited Co AOA shall state: If have share capital : the amount of share capital at time of registration If not having share capital : number of members at time of registration List & enumerate voting & other rights attached to different classes of shares and securities issued or to be issued by the Co.
Printed, divided into paragraph numbered consecutively, signed by subscribers and dated > In addition to the general particulars to be added on signing MOA a subscriber shall specify his NIC number or his passport number in the case of foreign national Provided that in case of a person other than a natural person, the address of its registered office or principal office shall be specified and the authorized representative signing the documents shall also add his particulars as stated in this rule
28
Alteration of articles
Co by special resolution alter AOA (as valid as originally contained in AOA) If alteration affects the rights/liabilities of members / class of members, it shall be carried out only by approval of 3/4th Majority of those.
FORMS OF MEMORANDUM AND ARTICLES 29
Forms of memorandum and articles
Company Type - Co Ltd by Shares AOA - Co Ltd by Shares MOA - Co Ltd by Guarentee (Not having Sh.Cap) - MOA+AOA - Co Ltd by Guarentee (Having Sh.Cap) - MOA+AOA - Unlimited Co - MOA+AOA
First Schedule Table A Table B Table C Table D Table E
GENERAL PROVISIONS WITH RESPECT TO REGISTRATION OF MEMORANDUM AND ARTICLES 30
Registration of memorandum and articles
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- MOA & AOA+ Declaration of compliance with req. of ordinance filed with registrar. - Registrar if satisfied may register the MOA & AOA - If registrar refused to register; subscribers shall supply deficiency or appeal within 30days to. Registrar; If refusal passed by Additional/Joint/Deputy/Assistant Registrar SECP; If refusal passed by Registrar; SECP decision shall be final & not be challenged
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section > MOA and AOA filed for registration to registrar, shall be properly stamped as required by Stamp Act, 1899, and shall be accompanied by 3 copies duly subscribed and witnessed along with specified declaration Declaration shall be made in Form 1 by a person engaged in formation of the company who is 1. An advocate, entitled to appear before any High Court in Pakistan or the Supreme Court; or 2. A member of the ICAP or the ICMA practicing in Pakistan; 3. A person named in the articles as a director or other officer of the company. Registrar may require any person making declaration or is a promoter or director of proposed Co or is a witness to signatures of subscribers to memorandum to furnish such information, clarification or document as deem necessary.
31
Effect of memorandum and articles
- On registration Bind the Co. & members just as it is signed by each member - All money payable by any member to Co under MOA/AOA shall be debt due from him to Co.
32
Effect of registration
- The registrar shall certify the incorporation of a company. - From the date of incorporation subscribers of AOA become members of Co - Company shall start by name contained in MOA as separate legal person.
33
Conclusiveness of Certificate of Incorporation
Evidence of compliance with all requirements of Co.Ord 1984 in respect of registration.
34
Effect of alteration in memorandum or articles
Members are not bound by the alteration which increases their liability or require them to subscribe for more shares unless he agrees in writing.
35
Copies of memorandum and articles to be given to members.
Within 14 days of request on payment of prescribed amount.
36
Alteration of memorandum or articles to be noted in every copy
Every copy of MOA & AOA issued after alteration shall confirm with altered MOA & AOA.
PROVISIONS WITH RESPECT TO NAMES OF COMPANIES 37
Prohibition of certain names
- No company shall be registered by a name which is Inappropriate or deceptive (in the opinion of the SECP) Designed to exploit or offend the religious susceptibilities of the people. Identical with name of a company already registered Nearly resembling that name of a company already registered (except where Existing Co is in course of being dissolved & signifies its consent) - Prior approval of SECP required if name suggests The patronage of any, past or present, Pakistani or foreign, Head of State Any connection with the Federal Government or a Provincial Government or any department or authority of any such Government; Any connection with any corporation set up by or under any Federal or Provincial law The patronage or any connection with foreign Government/international organisation - Decision of the SECP regarding validity of name shall be final > Promoters of Co desirous of having Co registered, or a responsible officer of company intending to change its name, may make an application to registrar concerned asking for information as to whether proposed name is or is not available for adoption,and registrar shall, furnish information ordinarily within 2 days of receipt of application.
38
Rectification of name of a company
If wrong name selected by Co, it may change name with the approval of registrar & shall if registrar directs within 30days of direction. Registrar shall, before issuing direction for change of name, afford Co an opportunity to make representation against proposed direction Registrar cannot bound Co to change name after expiration of 3 yrs from registration
39
Change of name by a company
Special Resolution + Approval of registrar. - No approval required if addition or deletion of word “(Private)”
40
Registration of change of name and effect thereof
- Registrar shall issue a new certificate of incorporation altered to meet the circumstances - Continue to mention is former name along with its new name on the outside every business place and in all the documents (for 1 year from date of issue of new certificate) - Change of name shall not affect the rights & obligations of Co. - Legal proceeding may be continued against the Co in new name (Addition or deletion of word “(Private)” not deemed as a change of name)
41
Alteration of names of commencement of ordinance and change of status of company
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Every existing company deemed to include, before last word "Limited", "(Private)" for private company and the "(Guarantee)" in the case of a company limited by guarantee Conversion of a public company into private company registrar shall add "(Private)" Conversion of a private company into public company registrar shall delete "(Private)"
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
ASSOCIATIONS NOT FOR PROFIT 42
Power to dispense with “Limited” in the name of charitable and other companies
If an association formed for promoting commerce, art, science, religion, sports, social services, charity or any other useful object, and applies / intends to apply its profits/income in promoting its objects, and to prohibit the payment of any dividend to its members,
SECP may grant license & direct its registration as Co with limited liability, without addition of words "Limited", "(Private) Limited" or "(Guarantee) Limited", to its name. License granted on such conditions and subject to such regulations as SECP thinks fit Association enjoy all privileges of limited Co and be subject to all its obligations, except using the words "Limited", "(Private) Limited" or "(Guarantee) Limited", License may at any time be revoked by SECP; the registrar shall again add the above words to name and association cease to enjoy exemptions & privileges Before revocation SECP give association an opportunity of submitting representation.
> Promoters or members of such association shall make an application to SECP in writing duly singed by them or by any person authorized by association accompanied by 3 copies of draft memorandum and articles of proposed association; A list of promoters of the association with their occupations and addresses; Declaration by a person specified in rule 4 (sec 30) that he has scrutinized application and accompanying documents, and is satisfied about compliance with provisions of ordinance & fulfillment of conditions Names of companies, associations and other institutions in which promoters of proposed association hold any office stating the office held in each case; If association is already in existence, a copy of audited BS, I&E a/c and annual report on working of association for the financial year immediately preceding the date of application Estimate of future annual income & expenditure of proposed Co, specifying sources of income & objects Brief statement of work already done by the association or proposed to be done after registration. Besides others the following conditions shall also be fulfilled and shall be included in MOA The association shall be formed as a public company; Payment of remuneration for services or otherwise to its members, whether holding an office in the company or not, shall be prohibited; No change in the MOA and the AOA shall be made except with the prior approval of SECP The limit of liability of its members shall not be less than a reasonable amount Patronage of any government or authority, express or implied, shall not be claimed unless such government or authority has signified its consent thereto in writing.
COMPANIES LIMITED BY GUARANTEE 43
Provisions as to companies limited by guarantee
Any provision in MOA/AOA/Resolution of Co Ltd by Guarantee (not having Sh.Cap) giving any non member right to participate in the divisible profits of Co shall be void. Every provision in MOA/AOA/Resolution of Co Ltd by Guarantee purporting to divide undertaking of Co into shares/interests shall be treated as a provision for share capital
PROVISIONS RELATING TO CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY AND VICE VERSA AND OTHER MATTERS 44
Conversion of public company into private company
Prior approval of SECP in writing, and subject to such conditions as may be imposed by SECP > Where the alteration of articles has effect of converting a public Co into a private Co, the Co shall, not later than 60 days from date on which special resolution was passed, make application in Form 2 to SECP for its approval.
45
Prospectus or statement in lieu of prospectus to be filed by private company ceasing to be a private company
-
Within 14 days of such change File Prospectus or SILOP to registrar. Prospectus or SILOP shall comply with prescribed conditions (Part V of Co.Ord 1984)
46
Consequences of default in complying conditions constituting a company a private company
Cessation of privileges & exemptions availed by a Pvt. Co. May be relived of the consequences of such non compliance on an application made to SECP by Co or interested persons
CARRYING ON BUSINESS WITH LESS THAN THE LEGAL MINIMUM OF MEMBERS 47
Liability for carrying on business with less than three or, in case of a private company, two members
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Co carries on business > 6 months with less than minimum members, every member of Co (knowing the fact) during that time shall be severally liable for payment of the whole debts of the Co contracted during that time
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
SERVICE AND AUTHENTICATION OF DOCUMENTS 48
Service of documents on company
Sending
it to Co / officer at Reg. Office of Co by Post under a certificate of posting or Registered post, or Leaving it at Reg. Office of Co
49
Service of documents on registrar
Sending
it to Registrar at his office by Registered post, Delivering it to him, Leaving it for him at his office, against an acknowledgment of receipt.
50
Service of notice on members, etc.
-
-
51
Authentication of documents and proceedings
Personally Sending it by post to him to his registered address or, If has no registered address in Pak, to address, if any, within Pakistan supplied by him
Where a notice is sent by post, notice deemed to have been effected at the time at which the letter would be delivered in he ordinary course of post. If a member has no registered address in Pakistan, nor supplied any other address; advertisement in newspaper circulating in province of registered office deemed to be notice duly given to him on the day on which the advertisement appears For listed Co, also publish notice in 1 English + 1 Urdu newspaper having circulation in province of stock exchange Notice to joint-holders of share may be given to joint-holder named first in the register Notice in case of death/insolvency given to legal representative/assignee of insolvent Notice of every general meeting shall be given to every member, legal representative (in case of death) or assignee (in case of insolvent) and auditors.
Document/proceeding requiring authentication by Co - May be signed by CE or a director, secretary or other authorised officer of Co; and - Need not be under its common seal >
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
REGISTERED OFFICE, PUBLICATION OF NAMES, ETC 142
Registered office of company
-
143
Publication of name by a limited company
Have a registered office within earlier of 28 days of incorporation or beginning of business Notice of location or change be communicated to registrar within 28 days of incorporation or change Inclusion in the annual return / other document of Co of the address of its registered office shall not be taken to meet the requirements of this section
144
Penalties for non-publication of name
145
Publication of authorized as well as paid-up capital
-
Paint or affix, name outside every office / place of business, in a conspicuous position, in letters easily legible and in English or Urdu characters, If the registered office is situated beyond the local limits of civil jurisdiction of a High Court; In the characters of one of the vernacular languages used in that place; Shall have its name engraved in legible English or Urdu characters on its seal; Mention its name in legible English or Urdu characters, in all bill-heads and letter papers and in all documents, notices bills of exchange, hundis, promissory notes, endorsements, cheques, orders for money or goods, all bills of parcels, invoices, receipts and letters of credit of Co.
Not painted/affixed…… Fine = 200/day Name not engraved on the seal or not printed on documents (Fine = 2000 + personal liability of person who authorizes the use of seal or document.)
If any notice/advertisement/official publication of Co contains amount of the Authorised capital; that document shall also contain in equally prominent position + equally conspicuous characters the amount of Subscribed & Paidup capital
COMMENCEMENT OF BUSINESS BY A PUBLIC COMPANY 146
Restrictions on commencement of business
- A company shall not commence any business or exercise any borrowing powers unless: Shares have been allotted in cash not less than the minimum subscription Every director of Co has paid to Co in cash full amount on each of the shares taken or contracted to be taken by him No money is or may become liable to be repaid to applicants for any shares or debentures which have been offered for public subscription by reason of any failure to apply for / obtain permission for shares or debentures to be dealt on stock exchange Filed with the registrar a duly verified declaration by the chief executive or one of the directors and the secretary in the prescribed form that conditions complied with Registrar has issued a certificate of commencement of business (conclusive evidence) Co has filed a prospectus or SILOP. - Any contract made by a company before the date at which it is entitled to commence business shall be provisional only, and shall not be binding on Co until that date - Section shall not apply to Private Co, or Co Ltd by guarantee and not having share capital. - Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures or the receipt of any money payable on application for debentures.
REGISTER OF MEMBERS AND DEBENTURE-HOLDERS 147
Register of members and index
Name, Father name, description, nationality, occupation & addresses of members Amount & no of shares held by these Date of acquiring shares Amount paid on the shares Date of entering a member in register Date of ceasing + reasons for ceasing - For married woman or widow, name of husband or deceased husband also required. - Co having more than 50 members shall keep an index of names of members - Within 14 days after alteration in register, make alteration in the index
148
Trusts not to be entered on register
No notice of any trust, expressed, implied or constructive, shall be entered on the register of members, or sent to registrar
149
Register and index of debenture holders
Name, Father name, description, nationality, occupation & addresses of Deb.Holder Date of entering a Deb.Holder in register Date of ceasing - For married woman or widow, name of husband or deceased husband also required. - Co having more than 50 Deb.Holders shall keep an index of names of such - Within 14 days after alteration in register, make alteration in the index
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Company Law (Quick Revision) Notes
Sec
Section Title
150
Inspection of registers
151
Power to close register
Quick Revision of the Section - These registers shall be kept at Reg.Office - Open to inspection by members at least 2 hours during business hours - Certified copy of registers to be provided within 10 days (excluding non-working days) [Rs.200]
152
Power of court to rectify register
Co may close register by a notice of not less than 7day by way of advertisement in newspapers of province of Reg.Office (For listed : Also in province of Stock Exchange). Closure not exceeding 30 days at one time and not exceeding 45 days in whole year. Where name fraudulently entered / omitted; or default / unnecessary delay in entering or removing name of member; Person aggrieved may apply to court for rectification. Court may either refuse or order rectification of registers Court may decide any question relating to title of any person (party to application).
154
Notice to registrar of rectification of register
Court shall cause a copy of order to be forwarded to Co and shall direct Co to file notice of rectification with the registrar within 15 days from the receipt of the order.
155
Register to be evidence
Prima Facie evidence of any matter (which by this ordinance) is directed or authorized to be inserted therein.
156
Annual list of members, etc.
- Company with Share Capital Form A - Company without Share Capital Form B As on date of AGM or last day of calendar year (Dec 31,if AGM not held / held but not concluded) prepare and file with the registrar a return on Form A / Form B Listed co. = Within 45 days (extension may be granted for not > 15days) Other co. = Within 30days All particulars required to be submitted shall have been previously entered in 1 or more Co’s Register(s)
MEETINGS AND PROCEEDINGS 157
Statutory meeting of company
Every Public Co (including Private Co converted into Public Co within 1 year of incorporation) and every Co Ltd by guarantee & having Sh.Cap must hold "statutory meeting" not less than 3 and not more than 6 months from commencement of business. Statutory Report - The directors shall 21 days before meetings circulate “statutory report” to all members. - Signed by not less then 3 directors, 1 of which will be chief executive. - Statutory report shall include: Total No of shares issued, distinguishing shares allotted for cash & other then cash Total consideration received against shares allotted Abstract of receipts and payments made upto a date within 7 days of report, showing Receipts from issue of shares and debentures and other sources Payments made Balance remaining on hand Estimated amount of preliminary expenses including discount or commission paid Names, addresses and occupation of directors, chief executive, secretary, legal advisors and auditors or changes therein from the date of incorporations Details of any contract to be presented before meeting for approval / modification Extent of carrying or not carrying out underwriting contracts + reasons for not carrying Details of any brokerage paid to any private Co for shares issued to any directors -
158
Annual general meeting
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Report shall briefly state affairs of Co since incorporation + its business plan + any changes Shall contain auditors’ certificate for correctness of allotment of shares & receipt of money Co shall send 5 copies,duly verified, to registrar for registration after sending to members
Proceedings of Statutory Meeting - Directors shall cause list of members (& their particulars) to be produced at commencement of meeting & shall be open for inspection by any member during meeting. - Members may discuss anything at meeting regarding incorporation and its operations - No resolutions can be passed without notice being given to members in specified manner. - Meeting may be adjourned from time to time and any resolution passed in the adjourned meeting will be as effective as the original one.(provided notice given in specified manner) - If petition is filed for winding up of the Co for not holding the statutory meeting, Court may give directions to hold a meeting or file a report or make such orders as it think fit. - 1st AGM; Within 18 months of incorporation - Subsequent AGM; - Once in every year - Within earlier of a) 4 months from close of its financial year b) 15 months from previous AGM. - Extension of 30 days can be granted by SECP for listed Co & registrar for any other case - No extension in 1st AGM - AGM of listed Co shall be held in town of Reg. office, unless allowed otherwise by SECP. - Notice of AGM shall given to members 21 days before meeting. For listed Co notice also be published in 1 Urdu & 1 English newspaper having circulation in province of stock exchange
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section > Application for extension in time for holding any AGM (not being first AGM) or laying before AGM a BS and P&L a/c or I&E a/c shall be submitted to SECP/Registrar not less than 30 days before last date on which such general meeting required to be held (For special reasons to be recorded, an application submitted less than 30 days before last date on which AGM is required to be held can also be entertained) The application of extension (accompanied by last audited balance-sheet and profit and loss account) shall state The registration number, name and address of the company; Date on which the last general meeting was held and the financial year for which the financial statements and reports relating to accounts were laid at such meeting; Date up to which AGM is required to be held and financial statements & reports laid therein Reasons for not being able to hold AGM or laying financial statements & reports at the general meeting by the required date and justification for extension in period to the extent applied When delay is attributed to non-completion of books of accounts / non-finalization of audit, the exact state of books of accounts with reasons for such with certificate of Co’s auditor as to state of its accounts, reasons for delay and minimum time required for it.
159
Calling of extraordinary general meeting
-
All meetings other than AGM and Statutory meeting shall be called EOGM. Notice of EOGM shall given to members 21 days before meeting. For listed Co notice also be published in 1 Urdu & 1 English newspaper having circulation in province of stock exchange In emergency; directors may apply to registrar for allowing a shorter notice. The directors may call an EOGM at anytime for taking approval of members on any matter.
Meeting on requisition of members - Also can be called on requisition of members > 1/10th of voting power at date of requisition - Requisition shall state the objects of meeting + signed + deposited at Reg.Office of Co - On such requisition directors shall call the EOGM. If directors do not call EOGM within 21 days of requisition; members shall call within 3 months of requisition. - Meeting shall be caused in same manner as would have been called by directors. - All expense incurred by member for such meeting shall be reimbursed by Co and same amount shall be retained from amounts payable to directors who defaulted calling meeting 160
Provisions as to meetings and votes
Notice - Shall state time, place and day of the meeting + business to be transacted. - Given to every member/nominee of member in case of member’s death and auditor of Co. - Notice shall be given in accordance with the section 50 of Co. Ordinance 1984. - Failure to forward notice to any member will not invalidate the proceedings of meeting. Special Business - If any special business is to discussed at meeting; notice shall include statement of all the facts about the business and shall disclose full the interests of any directors, if any, - If the meeting involves approval of some document then the place and time at which the document may be inspected should be stated in the statement. - All businesses other then the following are special businesses Consideration of accounts, auditors' and directors' reports Appointment of auditors and fixing their remuneration Declaration of dividends Election or appointment of directors Quorum - Unless larger number fixed by AOA, quorum shall be: Listed Co: 10 members personally present > 25% voting powers present in person/proxy Others : 2 members personally present > 25% voting powers present in person/proxy SMC : 1 person either present in person or through proxy. - If Quorum not complete within half hour of meeting, if called by requisitionists; it shall be dissolved. If called by the Co; it shall be adjourned to same day, time and place in next week. - If quorum not present within half hour at adjourned meeting, quorum shall be not less then two members (unless the articles provide otherwise) Chairman - The chairman of the board shall chair every General Meeting - If there is no such chairman or chairman not present within 15 minutes of start of meeting or is unwilling to chair meeting then any director can chair. - If no director is present or is unwilling, then members can select any person as chairman. Voting - Every member shall have voting rights proportional to paid up value of securities held - Fractional votes shall not be accounted for. - No member can be debarred from using his voting rights. - All members may participate in the meeting either personally or through proxy - On show of hands every person shall have 1 vote - In case of Co Ltd by guarantee and having no Sh.Cap every member shall have one vote - On poll votes may be given either personally or through proxy
160 A
Circumstances in which proceedings of a general meeting may be declared invalid
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Where material defects or omission in the notice or irregular proceedings of the meeting... - On a petition filed by members having 10% or more voting rights to court - Within 30 days of the meeting - Court may declare such proceedings/part invalid & direct holding of fresh general meeting
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Company Law (Quick Revision) Notes
Sec 161
Section Title Proxies
Quick Revision of the Section -
162
Representations of corporations at meetings of companies and of creditors
163
Representation of federal government, etc, at meetings of companies
164
Notice of resolution
Every member entitled to attend the meeting is entitled to appoint a proxy Members of Co not having Sh.Cap cannot appoint proxies. No member shall be entitiled to appoint more then 1 proxies If appoints more then 1 proxies all instruments of proxies submitted shall be invalid A proxy must be the member of the Co unless AOA provide otherwise. Every notice of the Co shall set out the member's right to appoint proxy + proxy form Proxy instrument shall be filed in writing and signed by appointer If appointer is a body corporate then also need to be under its seal. Proxy instrument shall be filed not later then 48 hours before the meeting Anything contained in AOA providing lesser period shall be void. Proxy shall have all the rights as the original appointer. Members / proxies can do anything in meeting like demanding a poll on some matter or abstaining from voting on some matter [Anything contrary to it in AOA shall be void] Every member entitled to inspect all proxies filed with Co during normal business hours. Provisions of this section apply to all general meetings & meetings of any class of members.
Where FG or PG as a member appoints a proxy, he shall be a deemed member and shall also have the same rights and powers including right to appoint proxy.
165
Voting to be by show of hands in first instance
166
Chairman’s declaration of result of voting by show of hands to be evidence
167
Demand for poll
A Co being a member of other Co by resolution of its directors authorizes any of its officials or any person to act as company’s representative. -A creditor may authorize any of its officials to represent it at the creditor’s meeting
Along with notice to members, a draft resolution other than routine resolutions. Member >10% voting power may also give notice of resolution to Co along with statement of resolution. Such notice shall reach Co Along with the requisition of EOGM; if the meeting called by members Before 15 days of the meeting; Any other case Co shall circulate the notice forthwith to all members.
Unless a poll is demanded voting shall be done by show of hands.
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Declaration by Chairman shall be evidence that voting by show of hands has passed a resolution or not, or whether or not has passed unanimously or with particular proportion. It shall be entered in the books of minutes and unless contrary is proved Chairman's declaration will be valid.
Before or on declaring result of voting by show of hands, a poll may be taken by the chairman of the meeting on his own or may be demanded by the following persons: - Public company: At least 5 persons entitled to vote, either present in person / proxy - Private company: 1 person (if no more then 7 persons are present in the meeting) - Private company: 2 person (if more then 7 persons are present) - Member(s) having > 10% voting power in the meeting personally / proxy - Members holding paid up shares >1/10 of total paid up capital of Co present person/proxy The demand of poll may be withdrawn anytime by the person demanding the poll.
168
Time of taking poll
Immediately ; For election of chairman or adjournment Any other case; Within time not more then 14 days from the day poll was demanded as the chairman may direct. After polling; chairman/his nominee and a representative of party demanding poll shall scrutinize results Chairman shall declare the result and has power to regulate manner in which polls may be conducted and the results of poll shall be final.
169
Resolution passed at adjourned meeting
Date of passing a resolution = Date on which it was in fact passed and not the earlier date
170
Power of commission to call meetings
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172
Filing of resolution, etc.
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If Co fails to hold statutory meeting, AGM or EOGM requested by members, SECP on its own motion or on application of any director or any member SECP may direct Co to hold such meetings in directed manner + ancillary directions including direction that 1 person present personally / proxy shall be deemed a meeting. Deemed to meeting called normally by Co in accordance with the provisions All costs borne by Co unless SECP directs same to taken from some defaulting official of Co. Printed/typed copy of Special Resolution duly authenticated by CEO or secretary of Co to be filed with the registrar within 15 days of passing thereof. Copy of every Special Resolution to be annexed to every copy of (registered) AOA issued after date of resolution. Copy of Special Resolution to be forwarded to members on his request on payment of a fee.
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Company Law (Quick Revision) Notes
Sec 173
Section Title Minutes of proceedings of general meetings and directors
Quick Revision of the Section -
A company shall keep books containing fair & accurate minutes of every general meeting and meetings of BOD/committee of BOD. Minutes shall include names of attendees. Copy of minutes of BOD meeting shall be provided to all directors with 14 days of meeting Unless proved contrary, every meeting for which minutes have been made shall be deemed to be called, held & conducted in accordance with Ord. and all proceedings deemed valid. Every minutes signed by chairman shall be evidence of the proceedings in that meeting. Books of minutes of the meetings shall be kept at the registered office of Co. Books open for inspection by members free of cost during normal business hours (not less than 2 hours each day) with such restrictions as may be imposed by the AOA Any member shall at any time after 7 days from meeting be entitled to have, within 7 days after request to Co, with certified copy of minutes of any general meeting (prescribed fee)
DIRECTORS 174
Minimum number of directors of a company
175
Only natural persons to be directors
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Only natural persons to be directors No director shall be the variable representative of a body corporate.
176
First directors and their term
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Number & names of first directors determined in writing by majority of subscribers of MOA If not determined all subscriber shall be deemed to be the directors of the company Term: Till 1st AGM.
177
Retirement of directors
178
Procedure for election of directors
SMC Other private Public (unlisted) Public (Listed)
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Fresh election of directors on request of substantial acquirer
1 2 3 7
First directors: 1st AGM. Subsequent: 3 years - Retiring directors shall continue to perform functions until successors are elected; and - Shall take immediate steps to hold the election of directors and in case of any hurdle report circumstances to registrar within 15 days of expiry of term of directors.
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178 A
At least At least At least At least
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Directors of Co shall, fix No of elected directors not later than 35 days before general meeting at which directors are to be elected Number so fixed shall not be changed except prior approval of general meeting Notice of meeting shall expressly state: No of elected directors fixed; and Names of retiring directors. Any person who seeks to contest in election of director shall (whether he is a retiring director or otherwise), file with Co a notice of his intention atleast 14 days before meeting Notice may be withdrawn at any time before holding of election All such notices received by Co shall be transmitted to the members atleast 7 days before meeting For listed Co: Notice also published in 1 Urdu & 1 English newspaper having circulation in province of relevant stock exchange For Co having share capital (where No of contestants > No of directors fixed) Votes = No of voting shares/securities held x No of directors to be elected. Member may give all votes to 1 candidate or divide them between more than 1 Candidate getting highest votes elected as director and then candidate getting next highest votes shall be so declared and so on until total directors elected. For Co not having share capital Elected by members of Co in general meeting in manner as provided in AOA Where a person acquires ≥ 12.5% voting shares of listed Co, in his own name, he may apply to SECP for requiring the company to hold fresh election of directors in forthcoming AGM. SECP may, if deems appropriate in interest of Co, its minority shareholders or capital markets generally, direct Co to hold fresh election. That person shall not sell/dispose shares of Co for atleast 1 year from date of election
179
Circumstances in which election of directors may be declared invalid
180
Term of office of directors
Elected Directors:3 years unless he earlier resigns, disqualified or otherwise ceases to hold office Casual Vacancy: Remainder of the term of the director in whose place he is appointed
181
Removal of directors
By Resolution in General Meeting: Provided; resolution for removal not deemed to have been passed if No of votes casted against resolution (i.e. in favor of director) is equal to or exceeds… Elected Directors: Minimum No of votes casted at immediately preceding election of directors. First / Casual Directors: Total votes [u/s 178(5)] divided by No of directors for the time being.
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- On application of members ≥ 20% voting power - Within 30 days of the date of election Court may, declare election of all directors or any one or more of them invalid if satisfied that there has been material irregularity in election procedures.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
182
Creditors may nominate directors
By creditors or other special interest holders by virtue of contractual arrangement.
183
Certain provisions not to apply to directors representing special interest
Provisions of Election; Term of Office; Removal not applicable on following directors: - Directors nominated by company or corporation (by virtue of investment or credit facilities) owned or controlled by FG(Federal Govt) or PG (Provincial Govt) - Directors nominated by FG or PG or SECP - Directors nominated by foreign equity holders on BOD of PICIC or any other company set up under a regional co-operation or other co-operation arrangement approved by FG Votes available to authority/person nominating him at election of directors shall exclude those minimum votes which would have been sufficient to elect such director if he had contested election
Term: shall hold office during pleasure of Corp/Co/Govt/Authority nominating him 184
Consent to act as director to be filed with registrar
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No person shall be appointed/nominated as director / CE of Co or represent such positions, nor shall any person name any other person as a director/CE or proposed director/CE, without giving his consent in writing for such appointment or nomination. Within 14 days from date of appointment/nomination Co shall file with registrar a list of persons who hv consented to act as director/CE alongwith their consent (prescribed forms)
Section not applicable to Pvt Co (not being subsidiary of a Public Co) 185
Validity of acts of directors
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187
Ineligibility of certain persons to become director
Any act of a director, or of a meeting of directors attended by him, shall not be invalid only due to any defect (subsequently discovered) in his appointment Director shall not exercise right of his office till the defect has been rectified
Ineligibilities of Directors - Minor; - Unsound mind; - Has applied to be adjudicated as an insolvent and his application is pending; - Undischarged insolvent; - Has been convicted by a court of law for an offence involving moral turpitude; - Has been debarred from holding such office under any provision of this Ordinance; - Has betrayed lack of fiduciary behaviour (u/s 217) at any time during preceding 5 years; - Not a member except Person representing Govt / Institution / Authority which is a member; Whole-time director who is an employee of the company; Chief Executive Person representing a creditor Additional Ineligibilities only for Listed Co - Declared by Court of competent jurisdiction as defaulter in repayment of loan to a financial institution, exceeding amount as may be notified by SECP time to time (1 Million) - Engaged in the business of brokerage, or is spouse of such person or is sponsor, director or officer of a corporate brokerage house (not applicable if Co itself is a Stock Exchange)
188
Vacation of office by directors
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Becomes ineligible u/s 187 Absents himself (without leave of absence from the directors) for longer of 3 consecutive meetings of BOD; or From all meetings of BOD for continuous period of 3 months He or any firm (of which he is a partner) or any private company (of which he is a director) Without sanction of general meeting accepts or holds any office of profit under Co other than chief executive or a legal or technical adviser or a banker; or Accepts a loan or guarantee from the company in contravention of sec 195
[Any additional grounds may be specified in AOA for vacation of office by directors] 191
Restriction on directors remuneration, etc.
For performing extra services (including holding of office of chairman) - Determined by directors / Co in general meeting in accordance with AOA For attending meetings, - Shall not exceed scale approved by directors/Co in general meeting accordance with AOA
192
Restriction on assignment of office by director
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193
Proceedings of directors
A director cannot assign his office to any person without the power given by company through AOA or any agreement and approved by a special resolution. Appointment by director (with approval of BOD) of an alternate director during absence from Pakistan of ≥ 3 months shall not be deemed to be assignment of office. Alternate director shall vacate office as soon as actual director arrives.
Quorum of Listed Co:
Higher of 4 or 1/3rd.
Directors of Public Co shall meet atleast once in every quarter of a year. SECP circular BOD meeting can also be done through tele/video conferencing. Meeting shall be valid if subsequently all directors signs and approve the minutes of said meeting
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Company Law (Quick Revision) Notes
Sec
Section Title
194
Liabilities, etc., of directors and officers
195
Loans to directors, etc.
Quick Revision of the Section Any provision in AOA/Contract with Co for exempting any Director/CE/Officer or any person (whether an officer or not), employed by Co as auditor, from, or indemnifying him against, any liability that would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company, shall be void - Exemption: Co may indemnify any such Director/CE/Officer/Auditor against any liability incurred by him in defending any proceedings(civil or criminal), in which judgment is given in his favor or in which he is acquitted, or in connection with any application in which relief is granted to him by the court. -
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196
Powers of directors
No Co shall directly/indirectly, make any loan to, or give any guarantee or provide any security in connection with loan made by any other person to, or to any other person by any director of that Co or of a Co which is its holding company or any partner or relative of any such director any firm in which any such director or relative is a partner any private company of which any such director is a director or member any body corporate at a general meeting of which ≥ 25% of total voting power may be exercised or controlled by any such director or his relative, or by two or more such directors together or by their relatives any body corporate whose directors/CE are accustomed to act in accordance with directions or instructions of CE, or of any director or directors, of that Co Co may, with approval of SECP, make loan or give any guarantee or provide any security in connection with loan made by any other person to whole-time employee director of Co for acquisition or construction of a dwelling house or land; or defraying the cost of any conveyance for personal use or house-hold effects defraying any expense on his or any relative’s (spouse and minor children) medical treatment as are ordinarily made or provided by Co to its employees This restriction shall not apply to Private Co, not being subsidiary of Public Co Banking company; Any loan made by a holding company to its subsidiary or any guarantee given or security provided by holding company in respect of any loan to its subsidiary. Every person shall within 14 days of his appointment as director/CE of Co file with registrar particulars of any loan taken, or guarantee or security obtained, prior to his appointment. This section shall apply to any transaction represented by a book-debt which was from its inception in the nature of a loan or an advance.
Directors may exercise all such powers of Co as are not by Ordinance/AOA/special resolution, required to be exercised by Co in general meeting. Directors of Co shall exercise following powers on behalf of Co by means of a resolution passed at their (BOD) meeting - make calls on shareholders in respect of moneys unpaid on their shares - issue shares - issue debentures or any instrument in the nature of redeemable capital - borrow moneys otherwise than on debentures - invest the funds of the company - make loans For Banking Co: Acceptance of deposits from public not be deemed a borrowing or placing of deposit with another banking company not be deemed making of loans
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authorise a director or firm (of which he is a partner) or any partner of such firm or a private company (of which he is a member or director) to enter into any contract with Co for making sale, purchase or supply of goods or rendering services with Co - approve annual/half-yearly/other periodical accounts requiring circulation to members - approve bonus to employees - incur capital expenditure on any single item or dispose of a fixed asset in accordance with given limits prescribed by SECP(See Rule 14Abelow) - undertake obligations under leasing contracts exceeding one million rupees; - declare interim dividend; and - having regard to such amount as may be determined to be material (as construed in the Generally Accepted Accounting Principles) by the Board to write off bad debts, advances and receivables; write off inventories and other assets of the company; and determine terms and circumstances in which a law suit may be compromised and a claim / right in favour of Co may be released/extinguished/relinquished The directors of Public Co or subsidiary of Public Co shall not except with consent of general meeting either specifically or by way of an authorisation, do any of the following things - Sell, lease or otherwise dispose of the undertakings or a sizeable part thereof, unless main business of the company comprises of such selling or leasing - Remit, give any relief or give extension of time for repayment of any debt outstanding against any person specified in section 195 > Amount of capital expenditure to be incurred on any single item shall be exceeding 1 million rupees Amount of book value for disposal of a fixed asset, shall be exceeding 100 thousand rupees
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
197
Prohibition regarding making of political contributions
A company cannot make any contribution to any political party or for any political reasons
197 A
Prohibition regarding distribution of gifts
No distribution of gifts (in any form) to members in meetings.
CHIEF EXECUTIVE 198
Appointment of first chief executive
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Every Co (other than Co managed by managing agent) shall have CEO Appointed by the directors within earlier of 15 days of incorporation or date of its commencing business Hold office till 1st AGM (unless resigns earlier) or shorter period (if any; fixed by directors)
199
Appointment of subsequent chief executive
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Appointed by the directors within 14 days of election of directors or casual vacancy Term; Not more than 3 years from the date of appointment. Retiring CE eligible for re-appointment. Retiring shall continue to perform until successor appointed unless non-appointment of his successor is due to any fault on his part or his office is expressly terminated.
200
Terms of appointment of chief executive and filling up of casual vacancy
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To be determined by directors or Co in general meeting in accordance with AOA. CE deemed to be director (if not already a director) and entitled to all rights & liabilities
201
Restriction on appointment of chief executive
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If he is ineligible on the grounds mentioned u/s 187 for directors.
202
Removal of chief executive
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By 3/4th of total number of directors in their meeting; or Co by special resolutions.
203
Chief executive not to engage in business competing with company’s business
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Whether directly or indirectly (carried on by spouse or minor children). If he is engaged in any business at the time of appointment in a public company, he shall disclose in writing nature of business and his interest therein.
204
Penalty
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Fine of 10,000 May be debarred from becoming director or C.E.O. of Co for not exceeding 3 years.
204 A
Certain companies to have secretaries
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Listed Co - Whole time secretary with prescribed qualifications Listed Co - Independent Share Registrar with prescribed qualifications SMC - Secretary with prescribed qualifications (not a whole time secretary)
> Directors of public listed company shall take reasonable steps to ensure that company secretary is a person who appears to them having requisite knowledge & experience to discharge his functions & who is A member of, A recognized body of professional accountants; or A recognized body of corporate or chartered secretaries; or An MBA/M.COM/law graduate from university recognized by HEC, having ≥ 2 years relevant experience A retired government servant in BS-19 or equivalent or above with at least 15 years service A person already engaged by a Listed Co as company secretary before 26 october, 2002, may continue in that capacity if he has an experience of ≥ 5 years. Co secretary of a single member Co shall be person holding bachelor degree from university recognized by HEC.
REGISTER OF DIRECTORS AND OTHER OFFICERS 205
Register of directors, officers, etc.
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Every company shall keep at its Reg. office a register of its directors, CE, managing agent, secretary, legal advisors and its auditors which shall contain the particulars prescribed. Persons file particulars with Co within 10 days of his appointment/any change therein. Co shall file the same to registrar within 14 days of its incorporation or any change therein. Register shall be open to inspection (>2 hours daily) to every member free of charge with restrictions as Co may impose. Other persons may also inspect register on prescribed fee. If inspection is refused by the Co; the registrar may direct Co for immediate inspection to be provided to person to whom it was refused.
> Following shall be particulars of directors and officers, including the CE, managing agent, secretary, chief accountant, auditors and legal adviser, for the purpose of Register of directors and other officers For individual, his present name in full, his father’s name, in the case of a married woman or a widow, the name of her husband or deceased husband, his NIC number and in case of foreign national passport number, his usual residential address, nationality and, if that nationality is not the nationality of origin, nationality of origin and his business occupation, if any, and if he holds any other directorship or other office the particulars of such directorship or office; For person other than natural person, along with its name and address of registered or principal office, all particulars (motioned above) of its directors/office bearers, - For firm, full name, address & (above mentioned) particulars of each partner, and date of becoming partner.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
BAR ON APPOINTMENT OF MANAGING AGENTS,SOLE PURCHASE AND SALES AGENTS, ETC 206
Bar on appointment of managing agents, sole purchase, sales agents, etc.
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No company (incorporated in Pakistan or outside) shall appoint any managing agent (Person, firm or company entitled to the management of the affairs of a company, by virtue of an agreement or contract with Co) Not applicable to Co managed by a managing agent wholly owned or controlled by FG/PG. FG may, by notification in the official Gazette, exempt any of the following classes of agreements or contracts from this restriction With an investment adviser in relation to investment company registered under rules made under the SECP Ordinance,1969 Approved by the FG, with a Foreign Collaborator in relation to company which owns a hotel in Pakistan; and Approved by FG in relation to a company formed for setting up (in collaboration with 1/more public sector financial institutions) an industrial undertaking which in opinion of the said Government, is likely to contribute to economic development of Pakistan With an NBFC licensed to undertake asset management services in relation to an investment Co registered with SECP With an NBFC licensed as a venture capital company in relation to a fund Co registered with SECP No company (incorporated in Pakistan or outside) which is carrying on business in Pakistan shall, without the approval of SECP, appoint any sole purchase, sale or distribution agent: Except; Where Co incorporated, or person ordinarily residing, outside Pakistan, unless the major portion of the business of such Co or person is conducted in Pakistan
TERMS OF APPOINTMENT OF MANAGING AGENT 207
Terms and conditions of appointment of managing agent
Where managing agent appointed in pursuance of any exemption available u/s 206, such appointment shall be subject to such terms and conditions as FG may deem fit to impose
MISCELLANEOUS PROVISIONS REGARDING INVESTMENTS, CONTRACTS, OFFICERS AND SHAREHOLDINGS, TRADING AND INTERESTS 208
Investment in associated companies and undertakings
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No investment in Associated Co/undertakings except special resolution No change in nature or terms & conditions made except with Special Resolution SR shall indicate nature, period and amount of investment and terms & conditions attached Return on investment ≥ borrowing cost of lending Co. [Investment includes loans/advances/equity/amount not in nature of normal trade credit] SECP may by notification in official Gazette, specify class of Co/undertakings to which this restriction not apply; & through regulations, specify conditions & restrictions on nature, period & amount of investment and terms & conditions attached + other ancillary matters
> A copy of every resolution passed for investment in associates, together with information & documents specified in Form 30 shall be filed with SECP & registrar concerned in case of a listed company, and with registrar concerned in the case of any other company within 14 days from the passing of resolution. Exemption from requirements of sec 208 by SECP Banking Co licensed by SBP for investment made in ordinary course of business,excluding equity investments DFI licensed by SBP for investment made in ordinary course of business,excluding equity investments NBFC licensed by SECP for investment made in ordinary course of business,excluding equity investments NBFC licensed by SECP to carry out Investment Advisory Services or Asset Management Services for investments made in collective investment scheme being managed by such NBFC Modarba management Co for investments in modarba being managed by it Holding Co for investment in wholly owned subsidiary (Disinvestment of > 25% made by special resolution) Co whose principal business is such investments Associates of NBFC licensed by SECP to carry out Asset Management Services for investments made in open end scheme being managed by such NBFC
209
Investment of company to be held in its own name
All investment made by a Co on its own behalf shall be made and held by it in its own name; Exceptions - Where Co has a Nominee director on any other Co, shares in that Co ≤ Qualification shares required to be held by a director, may be registered/ held by such Co jointly in its own name and in name of such person/nominee, or in name of such person/nominee alone - Holding company may hold any shares in its subsidiary Co in name of its nominee/nominees if necessary to ensure No of members of subs Co not reduced below minimum members - Investments made by investment Co whose principal business is purchase&sale of securities Certificates/letter of allotment relating to shares/securities in which investments made by Co shall be in custody of Co or such scheduled bank/financial institution as approved by SECP
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section Exceptions - Depositing with a bank, being banker of Co for collection of any dividend/interest payable - Depositing with/transferring/holding in name of scheduled bank/financial institution approved by SECP to facilitate transfer (if no transfer take place within 6 months from date of deposit/transfer, Co shall as soon as practicable after 6 month have same retransferred) - Depositing with/transferring to any person by way of security for the repayment of loan - Depositing with/transferring to/holding/registering in name of a central depository Where any such shares/securities not held by it in its own name - Co shall forthwith enter in register maintained for the purpose at registered office Nature, value & other particulars necessary to identify such shares/securities; and Bank or person in whose name or custody such shares/securities are held. - Register shall be open to inspection by any member/debenture-holder/creditor without charge, during business hours (not less than 2), subject to reasonable restrictions imposed by AOA/general meeting - if any inspection is refused, Registrar may on an application direct immediate inspection
210
Form of contract
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211
Bills of exchange and promissory notes
212
Execution of deeds
Deemed to have been made / drawn / accepted / endorsed on behalf of Co if made / drawn / accepted / endorsed in name of / by / on behalf / on account of, Co by any person acting under its authority (express/implied) -
213
Power of company to have official seal for use abroad
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214
Disclosure of interest by directors
Contracts on behalf of a company (by any person acting under its authority, express or implied ) may be made in writing or by parol only (not reduced into writing) All such contracts shall be effectual in law and shall bind the company and its successors and all other parties thereto, their heirs, or legal representatives as the case may be
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Co may, by writing under common seal, empower any person (generally/specified matters) as its attorney, to execute deeds on its behalf at any place either in or outside Pakistan Every deed signed by such attorney under his seal shall bind Co as if it were common seal If authorized by AOA, co. may have separate official seal for any territory outside Pakistan official seal shall be a facsimile of common seal of Co with addition on its face of name of every territory where it is to be used Co may, by writing under its common seal, authorise any person appointed in any territory not situate in Pakistan to affix the same to any deed or other document to Co is party Authority of agent shall continue during period mentioned in instrument authorizing him; If no period mentioned, shall continue until notice of revocation/determination of agent’s authority has been given to person dealing with him. The person affixing official seal shall certify the date and place of affixing. Official seal duly affixed shall bind Co as if it was common seal of Co Every director (himself/spouse/minor children) who is (directly/indirectly) concerned or interested in any contract or arrangement entered into, or to be entered into, by or on behalf of company shall disclose nature of his concern or interest at a meeting of directors: Time of Disclosure In case of a contract or arrangement to be entered into, at meeting of BOD at which the question of entering into contract or arrangement is first taken into consideration If director was not concerned or interested on date of that meeting; at first meeting of BOD held after he becomes concerned/interested In case of any other contract/arrangement, at first meeting of BOD held after director becomes concerned or interested A general notice given to directors if a director of Co is a director/member of a specified body corporate or firm and is concerned/interested in any contract/arrangement Which may, after date of notice, be entered into with that body corporate or firm, shall be deemed to be sufficient disclosure of concern/interest General notice shall expire at end of financial year in which it is given, but may be renewed for further 1 financial year by giving notice in last month of year of expiry General notice/renewal shall be effective only if given at meeting of BOD or takes reasonable steps ensuring it is brought up & read at first meeting of BOD after it [Nothing in this section shall restrict a director from having any such concern or interest]
215
Interest of other officers, etc.
No other officer shall enter into any contract or arrangement with Co in which he is directly or indirectly concerned or interested, unless he makes a disclosure & obtains approval of directors.
216
Interested director not to participate or vote in proceedings of directors
Over the approval of matter where he is interested director, cannot take part in discussion, or vote. Nor to be counted for purpose of quorum. Exceptions: Private Co (neither subsidiary nor holding of Public Co). Contract of indemnity against any loss which all or any of director(s), may suffer by reason of becoming or being sureties or a surety for Co Directorship contract with Public Co and interest of director is only due to himself being a nominated director on such Co (does’nt hold enough shares for being elected)
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
217
Declaring a director to be lacking fiduciary behavior
By the court if he contravenes section 214, 215(1) & 216. (Opportunity of show cause provided)
218
Disclosure to members of director’s interest in contract appointing chief executive, managing agent or secretary
Where Co appoints/enters into contract for appointment of, CE, managing agent, whole-time director or secretary of Co, in which any director of Co is concerned or interested ; or make changes in any such existing contract - Co shall make out and attach to directors report an abstract of terms of appointment or contract or variation, together with memorandum specifying nature of concern or interest - Co shall send such abstract + memorandum (only if director interested) to every member within 21 days from date of appointment/contract/variation (or date of interest; if later) - All such contracts shall be kept at registered office and shall be open to inspection by any member at such office; (Rules for taking extracts same as sec 150 i.e. Members Register) - Provisions shall same apply in relation to any resolution of BOD for such contracts
219
Register of contracts, arrangements and appointments in which directors, etc., are interested
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220
Register of directors’ shareholdings, etc.
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Register shall be kept containing separate particulars of all such contracts, arrangements or appointments u/s 214,215,216,218 including following particulars (whichever applicable) Date of contract, arrangement or appointment; Names of parties thereto; Principal terms and conditions; Date on which it was placed before the directors; Names of the directors voting for and against contract, arrangement or appointment and names of those remaining neutral; Name of director or officer concerned/ interested in such + extent/nature of interest Particulars shall be entered in relevant register within 7 days of Meeting of the directors at which contract, arrangement or appointment is approved (in case of a contract, arrangement, or appointment requiring directors' approval) Receipt of particulars at registered office (or within 30 days of date of such other contract etc; If later) and register shall be placed before next meeting of BOD and shall be signed by all directors present at meeting. (in case no approval required) Register shall also specify, in relation to each director, the names of firms and bodies corporate of which general notice has been given by him under sec 214. This section shall not apply to any contract or arrangement For sale, purchase or supply of any goods, materials or services, if value of such goods and materials or the cost of such services ≤ Rs.2000 in aggregate in any year By a banking Co for collection of bills in ordinary course of its business. Register shall be kept at registered office and shall be open to inspection by any member at such office; (Rules for taking extracts same as sec 150 i.e. Members Register) Every listed Co shall keep a register showing in respects of each Director/CE/Managing Agent/Chief Accountant/Secretary/Auditor(For Firm: All Partners) & person who is beneficial owner(directly/indirectly) ≥ 10% of listed equity securities: Following Particulars No, description & amount of any shares/debentures of Co / Subsidiary Co/ Holding Co / Subsidiary of Co’s Holding Co, held by or in trust for him, or of which he has right to become holder (whether on payment or not). Register shall also show date of, and price or other consideration for, transactions Where date of agreement and completion are different; note date of agreement Nature & extent of any position/interest/right on any shares/debentures recorded in relation to director/other person in register shall (if he requires so) be indicated in it Co shall not be affected with notice of, or put upon inquiry as to, rights of any person in relation to any shares/debentures (by complying this section). Register shall be kept at registered office and shall be open to inspection during business hours subject to reasonable restrictions by AOA/general meeting ( ≥ 2 hours/day) during 14 days before date of the AGM and to 3 days after its conclusion, it shall be open to inspection of any member/debentures holder; and Same/other period, be open to inspection of any person acting on behalf of SECP. SECP and registrar may at any time re quire a certified copy of register or any part thereof. Register shall also be produced at commencement of AGM and remain open and accessible during the meeting to any person attending the meeting. If Co refuse to allow inspection or supply a copy; Registrar may direct so immediately
221
Duty of directors, etc, to make disclosure of shareholdings, etc.
For the purpose of section 220, persons mentioned above shall give written notice of disclosure within 15days of acquisition or change of interest.
222
Submission of statements of beneficial owner of listed securities
To registrar & SECP (prescribed form & prescribed particulars), by persons mentioned u/s 220 Within 30 days of occupying position, acquisition or listing Within 15days of change of interest. Within such period as specified in order by SECP (if so requires)
223
Prohibition of short selling
On Director/CE/Managing Agent/Chief Accountant/Secretary/Auditor of listed Co (For Firm:All Partners) & person who is beneficial owner(directly/indirectly) ≥ 10% of listed equity securities
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Company Law (Quick Revision) Notes
Sec 224
Section Title Trading by directors, officers and principal shareholders
Quick Revision of the Section -
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Where any person mentioned in sect 223 makes any gain by purchase & sale, or sale & purchase of any security within a period < 6 months, such person shall make a report and tender amount of gain to Co + send intimation of this to registrar and SECP [Not applicable to security acquired in good faith in satisfaction of debt previously contracted] Where such person neglects to tender gain or Co fails to recover gain within (later of) 6 months of its accrual or 60 days of demand by Co, such gain shall vest in SECP and if gain not deposited in prescribed account, SECP may direct recovery as an arrear of land revenue [Gain = Highest price of 6months (Sale Price) minus Lowest price of 6months (purchase price)]
Explanation:- For section 222 & 224; beneficial ownership of securities of any person deemed to include: Securities beneficially owned, held or controlled by him or his spouse or by any of his dependent lineal ascendants or descendants If such person is a partner in a firm, securities beneficially held by such firm If such person is a shareholder in private Co, securities beneficially held by such Co [Gain in above cases shall be prorated according to his relative interest in firm/Pvt Co] > Any gain made shall be computed in the following manner Purchase at lowest rates shall be matched against Sales at highest rates prevailing within the 6 months, and recoverable amount calculated with respect to every individual transaction disregarding any other transaction, that is to say, lowest in rate & highest out rate of purchases and sales or sales and purchases shall be matched Purchases & sales shall be matched if securities involved in purchase & sale are of same class & same listed Co Distribution of bonus shares & allotment of right shares by listed Co to existing shareholder either on basis of his entitlement or on account of purchase of right allotment letters from market shall not constitute purchase Any loss from any transaction in listed security not be set off against gain from such security Amount of brokerage, stamp duty and other expenditure incurred in making gain may be deducted subject to production of such documentary evidence in support of expenditure incurred as may be acceptable to Co.
225
Contracts by agents of company in which company is undisclosed principal
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Agent or officer of such a contract shall make a memorandum of terms of such contract, specify person with whom it has been made, & shall deliver it to Co & copies to directors which shall be laid before directors at their next meeting. If default is made in requirements of this section, contract shall, at option of Co, be void as against Co; and such officer/agent shall be liable to a fine ≤ 2000 [ Not applicable to Private Co (not being subsidiary of a Public Co) ]
226
Securities and deposits, etc.
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227
Employees’ provident funds and securities
No company, officer of agent shall receive or utilize securities / deposits except in accordance with a contract in writing, & all moneys received shall be deposited in a separate bank account. Not applicable where money received is in nature of an advance payment for goods to be de livered or sold to an agent, dealer or sub-agent in accordance with contract in writing
Moneys/securities deposited with Co by its employees in pursuance of their contract of service - Shall be kept or deposited by Co within 15 days from date of deposit in Special account to be opened by Co for the purpose in a scheduled bank; or National Saving Schemes - No portion utilized by Co, except breach of contract of service by employee (after giving notice to him) Provident fund has been constituted by Co for its employees or any class of its employees - All moneys (Employer contribution + Employer contribution + Interest) receipt/accrual Be deposited in a National Savings Scheme; Special account to be opened by Co for the purpose in a scheduled bank; or (Where Co itself is a scheduled bank) Special account to be opened by Co for the purpose either in itself or in any other scheduled bank; or Be invested in Government securities; or In bonds, redeemable capital, debt securities or instruments issued by Pakistan Water and Power Development Authority (WAPDA) and in listed securities subject to conditions as may be prescribed by SECP. Where a trust has been created by a company with respect to any provident fund - Co shall be bound to collect contribution of employees concerned and pay such contributions + its own contributions to trustees within 15 days from date of collection - Obligations of Co shall devolve on trustees and shall be discharged by them instead of Co. Employees P.F. (Inv. In listed securities) Rules, 1996 Total investment up to 30% of PF Investment in particular Co < 5% of p/up capital of the investee Co Investee Co have a Minimum operational record of 5 years At least 15% dividend in preceding consecutive 3 years No default in financing facility publicly known Securities have been rated as an investment grade with minimum rating of BBB.
228
Right to see bank receipts for money or securities
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Any person depositing any money or security or making any contribution of provident fund shall be entitled to see receipt of bank / other body, on request to Co / Person concerned /Trustees.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
ACCOUNTS 230
Books of accounts to be kept by company
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231
Inspection of books of account by registrar, etc.
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233
Annual accounts and balance sheet
Every Co shall keep at registered office proper books of account with respect to all receipt & payments by Co and matters in respect of which these takes place; all sales and purchases of goods by Co; all assets & liabilities of Co; and in case of a Co engaged in production/processing/manufacturing/mining activities, particulars relating to utilisation of material/labour/other inputs/items of cost as may be prescribed, if such class of companies is required by SECP by a general or special order to include such particulars in books of accounts: All or any of books of account may be kept at such other place in Pakistan as directors may decide and within 7 days of decision, Co shall file with registrar a notice in writing giving full address of other place.(If other than registered office) Where a Co has a branch office (in/outside Pakistan) Co shall be deemed to have complied provisions of this section if proper books of account relating to transactions of branch office are kept at branch office and proper summarised returns, made up to date at intervals of not more than 3 months sent by branch office to Co at Place where books kept Proper books of account not be deemed to be kept if these not giving true and fair view of state of affairs of Co/ branch office and not explaining its transactions. Books of account and other books and papers of every Co shall be open to inspection by directors during business hours. Directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or regulations the accounts and books or papers of Co shall be open to inspection of members No member shall have any right of inspecting any account & books or papers of Co except as conferred by Ordinance/authorised by directors/by Co in general meeting Books of account of every Co shall be preserved in good order for > 10 years from immediately preceding current year (If Co incorporated < 10 years before current year, books of account for entire period shall be preserved). Section shall apply mutatis mutandis to books of account required to maintain by liquidator Books of account and books and papers of every Co shall be open to inspection by registrar/ any officer authorised by SECP for reasons to be recorded in writing (if they require so) Duty of every director, officer or other employee of Co to produce them all books and papers of Co and to furnish him with any such statement, information or explanation relating to affairs of Co, as said person may require of him within specified time and place Also duty of every director, officer or other employee of Co to give them all assistance Person making inspection may, during inspection make or cause to be made copies of books of account and other books and papers or place marks of identification Where inspection has been made under this section by an officer authorised by SECP; such officer shall make a report to SECP. Officer authorised shall have all powers of registrar under Ordinance for making inquiries.
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Directors shall lay before Co in AGM a BS and P&La/c or I&E a/c (for Co not for profit) Some date not later than 18 months after incorporation; and Subsequently once at least in every calendar year 1st Accounts; Since incorporation of Co to not earlier than AGM date by > 4 months Any other case; Since preceding accounts to not earlier than AGM date by > 4 months - Extension of 1 month (Special reasons) by SECP(for Listed Co) or Registrar(for any other Co) - Period of accounts shall not exceed 12 months except special permission by Registrar - BS and P&La/c or I&E a/c shall be audited by auditor of Co & auditor’s report shall be attached with it - Every Co shall in form & manner specified by SECP send a copy of these accounts + auditor’s report + director’s report to every member of Co at least 21 days before that AGM and keep copy at registered office for inspection of members during that 21 days period. - Listed Co shall also send 5 copies of such BS + P&La/c + other documents to SECP, stock exchange and registrar. > Application for extension in time for holding any AGM (not being first AGM) or laying before AGM a BS and P&L a/c or I&E a/c shall be submitted to SECP/Registrar not less than 30 days before last date on which such general meeting required to be held (For special reasons to be recorded, an application submitted less than 30 days before last date on which AGM is required to be held can also be entertained) The application of extension shall state The registration number, name and address of the company; Date on which the last general meeting was held and the financial year for which the financial statements and reports relating to accounts were laid at such meeting; Date up to which AGM is required to be held and financial statements & reports laid therein Reasons for not being able to hold AGM or laying financial statements & reports at the general meeting by the required date and justification for extension in period to the extent applied When delay is attributed to non-completion of books of accounts / non-finalization of audit, the exact state of books of accounts with reasons for such with certificate of Co’s auditor as to state of its accounts, reasons for delay and minimum time required for it. Shall be accompanied by a copy of the last audited balance-sheet and profit and loss account.
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Company Law (Quick Revision) Notes
Sec
Section Title
234
Contents of balance sheet
Quick Revision of the Section -
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234 A
Special audit
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Every BS of Co shall give a true and fair view of state of affairs of as at end of its financial year and every P&L a/c or I&E a/c shall give true and fair view of profit and loss of Co for the financial year Every item of expenditure fairly chargeable to income shall be brought into account Where any expenditure has been incurred in any financial year that can be distributed over several years, whole amount shall be stated + reasons of apportionment. BS and P&L a/c or I&E a/c shall comply with For listed Co (and subsidiary of listed Co) requirements of 4th Schedule For any other Co: Requirements of 5th Schedule Section shall not apply to insurance/banking/any other class of companies for which requirements of BS and P&L a/c are specified in law regulating such class Such IAS and other standards shall be followed for preparation of BS and P&L a/c as are notified in official Gazette by SECP For listed company Statement of changes in equity & cash flow statement shall form part of BS + P&L a/c Accounting policies shall be stated and, where there is any change in such policies, auditor shall report whether he agrees with change. FG may (on its own or upon application by Co) modify requirements of 4th/5th Schedule for the purpose of adapting them to circumstances of that Co. FG shall have power to grant exemption to any Co/class of Cos if it is in public interest so to do, from compliance with all or any of the requirements of 4th/5th Schedule SECP may (on its own motion or upon application by members ≥ 20% voting rights) order a special audit of Co and appoint an auditor to carry out detailed scrutiny of affairs of Co. During special audit SECP may pass such interim orders & directions as deemed appropriate On receipt of special audit report SECP may issue such directions for immediate compliance for Co & management as deems fit Auditor appointed for special audit have same duties and powers as Co’s statutory auditor
Expenses of Special Audit - If special audit ordered by SECP on application made by members; 1/2 expenses shall be borne & paid in advance by members, and 1/2 shall be borne by Co. - Where special audit ordered by SECP on own motion; expenses shall be payable by Co. These in first instance may be defrayed by SECP, and Co liable to reimburse same to SECP - Expenses liable to be paid by Co/members/any other persons shall be recoverable as arrears of land revenue. 235
Treatment of surplus arising out of revaluation of fixed assets
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236
Director’s report
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Where Co revalues its fixed assets, the increase in value of assets as appearing in accounts of Co shall be transferred to “Surplus on Revaluation of Fixed Assets Account” and shown in BS after Capital and Reserves. Revaluation Surplus shall not be Applied to set off or reduce any deficit or loss, whether past, current or future; or Applied/adjusted/treated so as to add to income/profit/surplus of Co; or Utilised (directly/indirectly) by way of dividend or bonus Revaluation Surplus can be utilized for Disposal of the assets which are revalued Setting off/in diminution of deficit arising from revaluation of any other fixed asset Charging incremental depreciation arising out of revaluation Depreciation on revalued assets shall be provided with reference to value of assets before revaluation and Revaluation Surplus may be amortized according to life of assets. Directors shall make out and attach to every BS a report about State of Co’s affairs, Amount (if any) recommended as dividend; and Amount (if any) proposed to carry to Reserve Fund, General Reserve or Reserve Account shown specifically in BS or to be shown specifically in a subsequent BS. For Public Co or Private Co subsidiary of public Co, directors report shall also Disclose any material changes and commitments affecting financial position of Co, occurred between end of financial year of Co and date of report; Deal with any changes occurred during financial year concerning nature of business of Co or its subsidiaries, or in classes of business in which Co has interest (whether as a member of another Co or otherwise), unless SECP exempts any company from making such disclosure (where such disclosures would be prejudicial to business of Co); Contain fullest information and explanation in regard to any reservation, observation, qualification or adverse remarks contained in auditor’s report; Circulate with it information about pattern of holding of shares in prescribed form; State name and country of incorporation of its holding company (if any outside Pak) State the earning per share (EPS); Give reasons for incurring loss and reasonable indication of future prospects of profit, (if any); and Contain information about defaults in payment of debts (if any), and reasons
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section -
237
Consolidated financial statements
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238
239
Financial year of holding company and subsidiary
Rights of holding company’s representatives and members
Balance sheet of modaraba company to include modaraba accounts, etc.
241
Authentication of balance sheet
With financial statements of holding company having subsidiary/subsidiaries at year end; attach consolidated financial statements of group presented as a single enterprise Consolidated financial statements shall comply with disclosure requirement of 4th Schedule and International Accounting Standards Where financial year of a subsidiary precedes holding Co’s financial year end by more than 3 months, such subsidiary shall make an interim closing on holding Co’s financial year end and prepare financial statements for consolidation purposes. Every auditor of holding Co shall also report on consolidated financial statements and exercise all powers and duties of an auditor All interim financial statements of subsidiary shall be reviewed by its own auditors Disclosed in consolidated financial statements Any qualifications contained in auditors’ reports of subsidiary/subsidiaries for the financial year ending with or during financial year of holding company; and Any note or saving contained in such accounts to call attention to a matter which, apart from note or saving, would properly have been referred to in such qualification, in so far the matter which is the subject of qualification or note is not covered by holding Co’s own accounts and is material Every consolidated financial statement shall be signed by same persons by whom individual balance sheet (BS) and profit and loss account (P&L a/c) or income and expenditure account (I&E a/c) of holding company required to be signed. All provisions of accounts & filling shall apply mutatis mutandis to consolidated accounts SECP may (on application or with consent of directors of a holding company) direct that in relation to any subsidiary, provisions of this section shall not apply to such extent as may be specified in the direction.
Directors of a holding Co shall ensure that financial year of each of its subsidiaries coincides with Co’s own financial year. ((except where there are good reasons against it) -
SECP (on application or with consent of directors of relevant Co) shall facilitate holding & subsidiaries allowing them to prepare accounts for extended period & hold AGM accordingly
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Holding Co may, by resolution, authorise representatives named in resolution to inspect books of account kept by any of its subsidiaries and books of account of any such subsidiary shall be open to inspection by those representatives at any time during business hours. Rights of appointing inspector to investigate Co’s affairs available to members of Co may also be exercised by members of holding Co as if they also were members of subsidiary
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240
Signed by chairman of directors or CE on behalf of directors (if authorised by directors) and when not so authorised, shall be signed by CE + atleast 1 director Directors of a holding company required to prepare consolidated financial statements u/s 237 shall also make and attach a report of group’s affairs containing same particulars.
There shall be attached to BS of a modaraba Co, annual accounts and other reports prescribed in “Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980” made out - As at the end of financial year of modaraba (if such financial year coincides with financial year of modaraba Co); and - As at the end of financial year of modaraba last before that of modaraba Co, (If financial year of modaraba does not coincide with modaraba Co) -
BS and P&La/c or I&E a/c shall be approved by directors & signed by CE + atleast 1 director When CE is for the time being not in Pakistan, these accounts shall be signed by atleast 2 directors for the time being in Pakistan [Statement signed by such directors explaining reasons for non-compliance shall be attached]
242
Copy of balance sheet to be forwarded to the registrar
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In addition to requirements of section 233, after BS and P&L a/c or I&E a/c have been laid before Co at AGM, such number of copies as may be prescribed (not less than 3 for listed Co or 2 for any other Co) alongwith reports & documents required to be annexed to same, signed by CE, directors, chairman or auditors of Co (Whoever required) shall be filed with registrar within 30 days from date of such meeting. If general meeting before which a BS is laid does not adopt BS and P&L a/c or income & expenditure account or defers consideration or is adjourned, a statement of that fact and reasons shall be annexed to said documents and copies required to be filed with registrar. This section shall not apply to a private company having paid up capital < 7.5 million
243
Right of member of company to copies of the balance sheet, etc., and the auditor’s report
Member of Co shall be entitled to be furnished with copies of BS and profit & loss A/C or income & expenditure A/C of Co, auditors reports and director’s report on payment of such sum as Co may fix (not exceeding maximum amount prescribed)
245
Quarterly accounts of listed companies
Every listed Co shall within 1 month of close of 1st, 2nd and 3rd quarter of its accounting year, - Prepare and transmit to members and stock exchange on which shares of Co are listed; P&L A/C for, and BS as at the end of, that quarter (whether audited or otherwise); and - File with registrar and SECP such number of copies as may be prescribed (not less than 3) Provisions regarding authentication of BS shall apply to half-yearly accounts
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section SECP Circular Placing of quarterly accounts on website instead of by post by a listed company - Approval in GM & consultation with stock exchange - Prior permission of commission - Inform shareholders through advertisement & SE and SECP in writing by post - Intimation to SECP through email after placing accounts on website. - Requirement of sending accounts to stock exchange & SECP still valid. - Provide accounts physically if requested by any shareholder
246
Power of commission to require submission of additional statements of accounts and reports
SECP may, by general or special order, require any Co or class of companies to prepare and send to members, registrar, any authority, stock exchange and any other person such periodical statements of accounts, information or other reports (audited by an auditor) in such form and manner and within such time, as may be specified in order
247
Rights of debenture holders, etc., as to receipt and inspection of report, etc.
Holders of debentures (including trustees for holders of debentures) of a Co shall have same right to receive on payment copies of BS and profit & loss A/C or income & expenditure A/C of Co and auditors reports and other reports as possessed by ordinary shareholders of the Co.
DIVIDEND AND MANNER AND TIME OF PAYMENT THEREOF 248
Certain restrictions on declaration of dividends
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249
Dividend to be paid only out of profits
250
Dividend not to be paid except to registered shareholders or to their order of to their bankers
251
Period for payment of dividend
Company directors may in a general meeting declare dividend Dividend shall not exceed the amount recommended by directors No profits paid out of profits from sale of any immovable property / capital assets unless Co operates in business of sale and purchase of property and assets And only after such profits are adjusted for any losses incurred on disposals of these Dividend can not be given out of unrealized gains on investment property credited to P&L
No dividend to be paid otherwise than out of profits of Co.
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Dividend to be paid to the registered share holder, or to his order, or to his banker, or to a financial institution nominated by him for the purpose. Separate application by banker/financial institution for payment of dividend not required. Dividend warrants sent through reg. post unless otherwise required in writing by sh.holder
- Within period specified by SECP (30 days) from the date of declaration. - Date of Declaration Interim dividend with notice of share transfer book closure given; Date of commencement of closing of share transfer register All other cases; Date of approval of dividend. - Penalty for delay in payment on Chief Executive 2 years imprisonment + Fine of 1 Million Rupees. Debarred from becoming CEO/director of Co and any other company for 5 years, - No offence deemed where Dividend not paid due to operation of law Shareholders has given such direction for payment which cannot be complied There is a dispute on regarding the right to receive dividend Dividend has been adjusted against any sum due to company by the shareholder Any other reason (where default was not on part of company) For delay Co shall make application & get permission from SECP within 45 days of declaration
AUDIT 252
Appointment and remuneration of auditors
Auditor 1st Subsequent Casual Vacancy
Time of Appointment Within 60 days of incorporation AGM Within 30 days of vacancy
Appointed by Directors
Term of Office Till 1st AGM
Members Directors
Till next AGM Till next AGM
Appointing authority in default Members shall appoint in GM within 120 days SECP SECP
- Auditor may be removed before conclusion of next AGM by Special Resolution - Appointment of audit firm by its name deemed to be appointment of all partners SECP shall appoint auditor where - 1st auditors not appointed by directors / members within 120 days of the incorporation - Subsequent auditor not appointed in an AGM - Casual vacancy not filled by directors within 30 days - Auditors appointed are unwilling to act - Auditors are removed by Co For exercise of powers by SECP; Co shall give notice within 1 week of powers being exercisable
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section Appointing Authority Directors SECP All other cases
Remuneration Fixed by Directors SECP Members
Code of Corporate Governance For Listed Co: Only firms having satisfactory QCR by ICAP
253
Provision as to resolutions relating to appointment and removal of auditors
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254
Qualification and disqualification of auditors
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255
Power and duties of auditors
Notice required for a resolution at AGM for appointing auditor other than a retiring auditor Member give notice to Co not less than 14 days before AGM Co shall sent a copy of notice to Retiring auditor; Forthwith Members atleast 7days before AGM. For listed notice be published in 1 Urdu & 1 English newspaper having circulation in province of relevant stock exchange Retiring auditor can make representation in writing Co shall sent copy of representation to each member or it shall be read in GM Not sent/read in AGM; if registrar doesn’t permit so on application of Co/other person Co shall intimate the registrar within 14 days of appointment / removal / casual vacancy together with the consent of appointed auditor. Auditor shall be a Chartered Accountant within meaning of CA Ord 1961 for audit of Public co Private Co which is subsidiary of Public Private Co having paid up s/cap > 3 million Rs Firm where all partners practicing in Pak are CAs, may be appointed by its firm's name. Following person disqualified for appointment as auditor of a Co A director, other officer or employee of Co Was (at any time) during preceding 3 years director/officer/employee of Co Partner or employee of any of above (director/officer/employee of Co) Spouse of the director of Co Person indebted to Co Not be considered indebted, if owes < 500,000 to a credit card issuer or has unpaid utility dues for period not exceeding 90 days Body Corporate Person or his spouse and his minor children or all partners of a firm who holds any shares in Co or its associated company. If person holds any shares in Co before appointment as auditor individually or as partner of firm, shall disinvest shares within 90 days of appointment. Person disqualified as auditor of Co also disqualified for its Holding / Subsidiary / Subsidiaries of its Holding If after appointment auditor becomes disqualified, he shall deem to vacate office with effect from date on which he becomes disqualified If an unqualified/disqualified person is appointed as auditor; It shall be void and SECP may appoint a qualified person in place of the auditor appointed by Co.
Powers -
Free access to all books & papers of Co and all the supporting documents Have right to take all such information and explanation as they think fit to perform duties. If Co has an office outside Pakistan, it shall be sufficient if all the books and papers of the branch are transferred to Pakistan and made available to auditors. - Entitled to receive all notices of GM like members & may also speak there. For Listed Co, Auditor/his authorized representative be present at AGM of Co at which accounts considred Duties - Auditor shall make a report on books of accounts and Financial statements of the Co and shall lay before the member in AGM. The report shall state; whether or not: They have obtained sufficient audit evidence for audit In their opinion, proper books of accounts have been kept The balance sheet and profit and loss account has been prepared in accordance with the Ordinance and are in agreement with their books The true and fair view has been given by these financial statements In their opinion all the expenditure incurred was for the purpose of the business and all the activities done were in conformity with Co’s objects Zakat deductable under Zakat and Ushr Ordinance 1980 been deducted & deposited. - If auditor's report makes reference to some other report or statement; Such report be annexed to auditor's report and be considered a part of report. - Federal Government may direct any Co or class of Co that the auditor’s report shall also include a statement of such additional matters as may be so specified. - Where any qualification is put in auditor's report, there shall be added the reasons for it and the true position of Co to the best of auditor's knowledge. - Provisions also applicable to auditor appointed to audit books & accounts of a liquidator.
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Company Law (Quick Revision) Notes
Sec
Section Title
256
Reading and inspection of auditors’ report
257
Signature on audit report, etc.
258
Audit of cost accounts
Quick Revision of the Section Read out in GM & open to inspection by any member
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Signed by auditor (or partner of audit firm practicing in Pakistan) Dated Indicate the place at which it is signed
Where any Co/class of Co required to keep cost accounts, FG may direct audit of cost accounts of Co be conducted in specified manner & stipulations by a CA or CMA having same powers, duties & liabilities as auditor of Co and other prescribed powers, duties & liabilities
POWER OF REGISTRAR TO CALL FOR INFORMATION, ETC. 261
Power of registrar to call for information or explanation
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-
262
Seizure of documents by registrar
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-
-
Where registrar is of opinion that any information, explanation or document is necessary with respect to any matter in any document submitted to him, he may, by a written order, call upon Co and any of its present or past directors, officers or auditors to furnish such information/explanation/ document, within specified time (not less than 14 days) Person who ceased to hold office more than 6 years before date of order not be compelled It is duty of Co & all persons mentioned above to furnish required info/expl/docs If no or inadequate info furnished; Registrar may call for inspection of such books and papers as considers necessary within specified time; duty of Co & persons to produce same. Registrar may attach info/expl/books or copy/extract of it with original document If info/expl/books not furnished within specified time, or is unsatisfactory Registrar may report the circumstances in writing to SECP. Where registrar has reasonable ground to believe that books and papers relating to, any Co/CE/officer/Associate may be destroyed, mutilated, altered, falsified or secreted, he may, after obtaining permission of Magistrate (first class/Court), search & seize that. Registrar may also so authorise any officer (not below the rank of assistant registrar) to Enter, with such assistance as required, the place where such books & papers kept Search that place in the manner specified in order; and Seize such books and papers as he considers necessary. Registrar shall return books and papers seized as soon as may be (not later than 30 days) SECP may, after providing Co an opportunity to show cause against order proposed to be made by it, allow registrar to retain such for a further period not exceeding 30 days: Registrar may, before returning take copies/extracts or put identification marks Every search or seizure made under this section shall be carried out in accordance with provisions of Code of Criminal Procedure, 1898 (Act V of 1898)
THIRD SCHEDULE (Contents of ANNAUL RETURN) – Ref section 156 Companies Having Share Capital (Form A) Registration Number Name of Co From made upto (date) Date of AGM Registered Office Address Email Address Office Tel Number Office Fax Number Nature of Business Authorised Share Capital (No, Face Value, Amount) Paid up Share Capital (No, Issue Price, Amount) Indebtedness on date of return (Mortgages/Charges) Particulars of Holding Co (Name, Reg #, % shares held) Chief Executive (Name, Address, NIC) Chief Accountant (Name, Address, NIC) Secretary (Name, Address, NIC) Legal Advisor (Name, Address) Auditors (Name, Address) List of directors on date of return List of members/debenture holders on date of return Transfer of shares/debentures since last annual return Declaration by Chief Executive/Secretary
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Companies not having Share Capital (Form B) Registration Number Name of Co From made upto (date) Date of AGM Registered Office Address Email Address Office Tel Number Office Fax Number Nature of Business Number of members
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Indebtedness on date of return (Mortgages/Charges) Particulars of Holding Co (Name, Reg #) Chief Executive (Name, Address, NIC) Chief Accountant (Name, Address, NIC) Secretary (Name, Address, NIC) Legal Advisor (Name, Address) Auditors (Name, Address) List of directors on date of return List of members/debenture holders on date of return
Declaration by Chief Executive/Secretary
Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
PROSPECTUS 52
Prospectus to be dated
53
Matters to be stated and reports to be set out in prospectus
Date of prospectus = Date of its publication. (unless the contrary is proved) -
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-
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Every prospectus issued by or on behalf of Co or any person who has been engaged or interested in the formation of Co Shall state the matters specified in Second Schedule and set out the reports specified therein Sufficient number of copies of prospectus shall be made available with Registered office of Co Stock exchange at which Co is listed/proposed to be listed Bankers to the issue Prospectus in its full text or in prescribed abridged form shall be published at least in one Urdu and one English daily newspaper Prospectus shall not be issued or an advertisement be published in newspaper less than 7 days or more than 30 days before the subscription list is due to open [SECP may for special reasons allow more than thirty days] Any condition requiring waiver to any requirement of this section shall be void Form of application shall be accompanied by a prospectus Not apply if form of application was issued in connection with underwriting agreement or In relation to shares or debentures not offered to the public.
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Director/other person responsible for prospectus shall not be liable for non-compliance if As regards any matter not disclosed, he proves that he had no knowledge hereof; or He proves that contravention arose from an honest mistake of fact on his part; or Contravention was immaterial or in opinion of registrar reasonably to be excused Director/other person shall not be liable for failure to include in prospectus, interest of directors/promoters in Co’s promotion or properties; unless it is proved that he had knowledge of the matters not disclosed. This section shall not apply to the issue To existing members or debenture-holders of Co of a prospectus/application form (whether right to renunciation is available or not); or Of a prospectus or application form uniform with shares or debentures previously issued and quoted on a stock exchange
54
Expert to be unconnected with the formation or management of company
Prospectus shall not include a statement (purporting to be made by an expert), unless expert is /has not been engaged/interested in formation/promotion/in management of Co.
55
Expert’s consent to issue prospectus containing statement by him
A prospectus including statement by expert shall not be issued unless - Expert has given his written consent to issue and has not withdrawn such consent before delivery of a copy of prospectus for registration; and - Statement of the fact (given consent & not withdrawn consent) appears in prospectus.
56
Penalty and interpretation
In sections 54 & 55, "EXPERT" includes an Engineer, Valuer, Accountant and every other person whose profession gives authority to a statement made by him.
57
Approval, issue and registration of prospectus
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-
-
-
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Listed Co and Co proposes to be listed shall not issue, circulate or publish any prospectus or other document offering for subscription/sale unless approval of SECP been obtained 60 days before the date of issue. SECP may, while according approval, impose such condition as it may deem necessary. Prospectus shall not be issued unless on or before date of its publication, Co has delivered to registrar a copy signed by every person named as a director/proposed director and have included in Any consent to issue of prospectus from any expert (if his statement included); and In the case of a prospectus issued generally, also 1) Copy of every contract appointing or fixing remuneration of CE/managing agent/secretary; 2) Copy of other material contracts (not being contract in ordinary course of business or contract entered into > 2 years before date of prospectus) 3) Where persons making any report under prospectus, a written statement signed by those setting adjustments on figures of those reports + reasons. Every prospectus shall, on the face of it State that a copy has been delivered to registrar Specify any documents required to be included to the copy so delivered or refer to statements included in prospectus which specify those documents; and State that application has been made/proposed to be made for listing(if applicable) Registrar shall not register prospectus unless Requirements of sections 52-57 have been complied with; and It is accompanied by consent in writing of person (if any), named as auditor, legal adviser, attorney, solicitor, banker or member of SE to act in that capacity.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
58
Terms of contract mentioned in prospectus or statement in lieu of prospectus not to be varied
Except subject to approval / authority given by Co in general meeting.
59
Civil liability for misstatements in prospectus
Person liable for misstatements in prospectus - Following persons shall be liable jointly & severely to pay compensation to every person who subscribes for or purchases any share/debentures on faith of prospectus for any loss or damage he may have sustained by reason of any untrue statement included therein Directors of Co at time of issue of prospectus; Every person authorising himself to be named and is named in prospectus either as a director, or having agreed to become director(immediately/after some time) Promoter of Co (who was a party to preparation of prospectus or a portion thereof) Auditor/legal adviser/atorney/solicitor/banker/member of SE to act in that capacity - Where consent of any person is required to issue of prospectus and he has given that consent, he shall not be treated as person authorising the issue of prospectus (Except for any untrue statement purporting to be made by him as an expert) Waiver of Liability No person shall be liable if he proves that - After agreed to become a director, he withdrew his consent before issue of prospectus and it was issued without his authority/consent - Prospectus was issued without his knowledge or consent, and on becoming aware of its issue, he forthwith gave reasonable public notice of the fact - After the issue of prospectus and before allotment, he (on becoming aware of any untrue statement) withdrew his consent and gave reasonable public notice of fact + reason - As regard every untrue statement purporting to be a statement Not be made on authority of an expert or of a public official document/statement, he believe, and did up to time of allotment believe that statement was true; and By an expert, he believe, and did up to the time of issue of prospectus believe, that person making statement was competent to make it and that person had given consent to issue of prospectus and had not withdrawn consent before delivery to registrar By an official person, it was a correct and fair representation of the statement, or a correct copy of, or a correct and fair extract from, the document: If an Expert has authorised issue of prospectus; He shall not be liable in respect of an untrue statement purporting to be made by him as an expert, if he proves that After giving his consent, he withdrew it in writing before delivery to registrar; After delivery to registrar and before allotment, he (becoming aware of any untrue statement) withdrew his consent & gave reasonable public notice of fact + reason He was competent to make statement and had reasonable ground to believe, and did up to the time of allotment believe, that the statement was true. Directors (excluding those without whose knowledge or consent the prospectus was issued), and every other person who authorised the issue thereof, shall be liable to indemnify against all damages, costs and expenses to which he may be made liable or in defending himself against any suit or legal proceeding brought against him (due to his name in prospectus) - Any person: Where prospectus specifies him as director and he has not consented to become a director, or withdrawn his consent before the issue of prospectus, and has not authorised or consented to issue thereof; or - Expert: Where his consent is required for issue of prospectus and he either has not given that consent or has withdrawn it before the issue of prospectus; Expert shall not be deemed to have authorised the issue of a prospectus by reason only of his having given the consent to be included in a statement purporting to be made by him as an expert.
60
Criminal liability for misstatements in prospectus
For untrue statement in prospectus, everyone who signed or *authorised issue of prospectus be punishable (Unless proves that statement was immaterial or he believes statement to be true) - Imprisonment for a term which may extend to 2 years, or - Fine which may extend to 10,000, or - Both **Expert, auditor, legal adviser, attorney, solicitor, banker or broker shall not be deemed to have authorised the issue of a prospectus by reason only of giving consent
61
Document containing offer of shares or debentures for sale to be deemed prospectus
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Where Co allots/agrees to allot with a view to all or any being offered for sale to public, any document offering for sale to public shall be deemed to be a prospectus issued by Co. All enactments & rules for contents, filing & registration of prospectus shall apply Provisions for misstatements/omissions in prospectus shall also apply. Person also required to file authorization with registrar (like directors u/s 57). Where offering person is a Co; it shall be signed by 2 directors (or authorsied agents) Where person is a Firm; shall be signed by at least 50% partners (or authorised agent)
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section -
-
62
Offer of shares or debentures for sale by certain persons
-
It shall be evidence that allotment was made with a view to being offered for sale to public, if it is shown that Offer for sale to public was made within 1 year of allotment/agreement to allot; At the date when offer was made; whole of the consideration to be received by Co in respect of shares or debentures had not been received by it; or Offer was made in pursuance of an understanding to which Co was a party or a condition imposed by any authority in relation to position/business/privileges of Co. Prospectus shall state (in addition to matters required by sec 53) Net amount of consideration received/to be received by Co; and Place and time at which contract of allotment may be inspected. Person having >10% shares/debentures shall not offer for sale to public except SECP’s approval Any document offering for sale to public shall be deemed to be a prospectus issued by Co. Where offering person is a Co; it shall be signed by 2 directors (or authorsied agents) Where person is a Firm; shall be signed by at least 50% partners (or authorised agent) All enactments & rules for contents, filing & registration of prospectus shall apply Provisions for misstatements/omissions in prospectus shall also apply. Person also required to file authorization with registrar (like directors u/s 57).
A notice, circular, advertisement or other offering document issued by scheduled bank or financial institution shall not be deemed to be a prospectus/offer for sale u/s 61 & 62
62A
Issue of securities outside Pakistan.
Co cannot issue any security outside Pakistan except with prior approval of SECP
63
Interpretation of provisions relating to prospectus
Statement included in prospectus or any report/memorandum appearing on face or reference -
64
Newspaper advertisement of prospectus
65
Construction of references to offering shares or debentures to the public etc.
Newspaper publication may omit contents of MOA/Signatories/No of shares subscribed
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66
Penalty for fraudulently inducing persons to invest money
Untrue Statement = Misleading Statement (In form & context) Untrue Statement = Omission (Where omission misleads the user)
In Ordinance/AOA “Public” includes any section of public (for such offer) "Section of public" includes existing members/debenture-holders or clients of issuer. Offer/invitation shall not be treated as made to public, if it can properly be regarded As not being offered to persons other than those receiving offer/invitation; or Otherwise as being domestic concern of persons making&receiving offer/invitation A provision in Co’s AOA prohibiting invitations to public shall not be taken as prohibiting such invitation to members/debenture-holders References in this section are applicable to Private Co’s
If knowingly/recklessly makes statement/promise/forecast that is false/deceptive/ misleading/ dishonest concealment of material facts, induces another person to enter into - Agreement for acquiring/disposing of/subscribing for/underwriting shares or debentures - Agreement for the purpose of securing profit to any of parties from yield of shares or debentures, or by reference to fluctuations in value of shares or debentures; (Imprisonment up to 3 years
or
fine up to 20,000
or both)
ALLOTMENT 67
Application for, and allotment of, shares and debentures
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68
Restriction as to allotment
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Application shall not be made of less than nominal amount as SECP may from time to time specify (generally/particularly). SECP may specify “Application Form” for subscription Form shall form part of prospectus. All certificates, statements & declarations made by applicant shall be binding on him. Application in pursuance of a prospectus shall be irrevocable.
For first allotment only - Allotment shall not be made unless minimum subscription (as defined in prospectus) has been paid to & received in cash by Co (shall be regarded exclusively otherwise than cash) - All moneys received shall be deposited in separate bank account in scheduled bank until returned (due to contravention) or until certificate to commence business is obtained. Amount payable on application shall be full nominal amount of the share. - If above conditions not been complied with until 40 days after first issue of prospectus All money received from applicants shall be forthwith repaid without surcharge If money not repaid within 50 days after prospectus, directors shall be jointly & severally liable for money + surcharge(1.5% per month/part thereof) from 50h day No liability if he proves that default wasn’t due to his misconduct/ negligence - Any condition requiring waiver of compliance with requirements of section shall be void. - For Co which does not issue invitation to public for subscription; no allotment shall be made unless following “minimum subscription” been received by Co(other than Pvt Co) Amount (if any) fixed by MOA/AOA and specified in SILOP Whole Share capital that is otherwise than in cash (If no amount fixed & specified)
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Company Law (Quick Revision) Notes
Sec
Section Title
69
Statement in lieu of prospectus (SILOP)
70
Effect of irregular allotment
Quick Revision of the Section Co having a share capital - which does not issue a prospectus on or with reference to its formation, or - which has issued such a prospectus but has not proceeded to allot any of shares Shall deliver to registrar a SILOP at least 3 days before first allotment, signed by every person named therein as a director or proposed director of Co or by authorised agent, in form and containing the particulars set out in 2nd Schedule. - Every SILOP shall have a written statement signed by aforesaid persons, setting out adjustments mentioned in 2nd schedule and giving the reasons thereof. - For untrue statement in SILOP, everyone who signed or authorised be punishable (Unless proves that statement was immaterial or he believes statement to be true) Imprisonment for a term which may extend to 2 years, or Fine which may extend to 10,000, or Both - For statement included in SILOP/report/memorandum appearing on face or reference Untrue Statement = Misleading Statement (In form & context) Untrue Statement = Omission (Where omission misleads the user) - This section shall not apply to a private company. -
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71
Repayment of money received for shares not allotted
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72
Allotment of shares and debentures to be dealt in on stock exchange
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73
Return as to allotments
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Allotment in contravention of sec 68 or 69 shall be voidable at instance of applicant within 30 days after holding of statutory meeting (Even Co is in course of winding up) Where Co is not required to hold statutory meeting or where allotment is made after statutory meeting, within 30 days after date of allotment Defaulting officer shall be liable to compensate Co + Allottee for any loss, damages or costs sustained by Co or allottee (Loss, damages or costs cannot be recovered after 2 years from date of allotment) Co shall take decision of acceptance within 10 days of closure of the subscription lists Co shall refund money of unaccepted/unsuccessful applications within 10 days of decision If refund not made within specified time, directors shall be jointly and severally liable to Repay money; and Surcharge @ 1.5%/month or part thereof from expiration of 15th day; Fine ≤ 5,000 (For continuing offence 100/day after 15th day) Director not be liable if proves that default was not due to his misconduct or negligence Any waiver to any requirement of this section shall be void. Where prospectus states that application has been or will be made for permission for shares or debentures offered to be dealt in on any stock exchange, Allotment be void if Permission has not been applied until 7 days after the date of prospectus Permission has not been granted until 21 days from closure of subscription lists [Stock Exchange may allow further 21 days(maximum) and notify to applicant] If permission not applied/granted as aforesaid, directors be jointly & severally liable to Repay money; and Surcharge @ 1.5%/month or part thereof from expiration of 8th day; Fine ≤ 5,000 (For continuing offence 100/day after 8th day) Director not be liable if proves that default was not due to his misconduct or negligence All moneys received shall be deposited in separate bank account in scheduled bank until returned (due to contravention) Any waiver to any requirement of this section shall be void. Permission shall not be deemed to be refused if it is intimated that the application (yet not granted) will be given further consideration. This section shall also be applicable to Shares or debentures agreed to be taken by an underwriter; and Prospectus offering shares for sale with following modifications a. Reference to sale shall be substituted for reference to allotment; b. Person by whom offer is made be liable to repay money (not Co); and c. Person by whom offer is made be liable to default (not Co)
Co having share capital shall within 30 days of allotment - File with registrar a return of the allotment, stating Number of shares Nominal amount of shares comprised in allotment Such particulars (as may be prescribed) of each allottee Amount paid on each share; and - Shares allotted otherwise than in cash; Produce for inspection & examination of registrar contract in writing constituting title of allottee to the allotment + any contract of sale, or for services or other consideration in respect of which that allotment was made These contracts shall be duly stamped File with registrar copies verified in prescribed manner of all such contracts Where contract not reduced to writing, Co shall, within 30 days after allotment, file with registrar prescribed particulars of contract stamped with same stamp duty as would have been payable if the contract had been reduced to writing.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section File a Return stating No and nominal amount of shares so allotted, amount to be treated as paid-up, and consideration for which they have been allotted Bonus Shares File with registrar, Return stating No & amount of such shares and particulars as may be prescribed of each allottee + copy of resolution authorising bonus issue Issue of shares on discount File with registrar, Copy of resolution passed by Co + copy of order of SECP sanctioning the issue, and where maximum rate of discount exceeds 10%, a copy of SECP order permitting the issue at the higher percentage.
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Shares allotted to scheduled bank or a financial institution - Section shall apply mutatis mutandis to shares allotted to scheduled bank or a financial institution in pursuance of any obligation of Co to issue shares to these Where default made by Co in filing Return of allotment, the scheduled bank or financial institution may file return of allotment with registrar + such documents as may be specified by SECP, and shall be entitled to recover from Co amount of any fee properly paid by it to registrar Registrar may extend the period of filing (if satisfies that 30 days is inadequate)
CERTIFICATE OF SHARES AND DEBENTURES 74
Limitation of time for issue of certificates
Co shall complete and have ready for delivery the certificates of all shares, debentures, all debenture stock allotted/transferred and shall give notice of this fact to applicant within - 90 days after allotment (New Shares) - 45 days after application (Transfer) - 05 days after application (if transfer in name of CDC) [ Transfer means transfer duly stamped & valid, and does not include transfer as Co entitled to refuse ]
Exceptions to time limit - Sent by post or delivered to the applicant - Conditions of issue of shares, debentures or debenture stock provide otherwise 75
Issue of duplicate certificates
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Within 45 days from date of application if original is proved to have been lost or destroyed, or having been defaced or mutilated or torn is surrendered to Co. Co issue duplicate after making inquiry and on such terms & conditions as may deem fit Co shall not charge fee exceeding sum prescribed + actual expenses incurred on inquiry. If Co for any reasonable cause is unable to issue duplicate certificate, it shall notify this fact + reasons within 30 days of application
TRANSFER OF SHARES AND DEBENTURES 76
Transfer of shares and debentures
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77
Directors not to refuse transfer of shares
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Register of transfers of shares & debentures shall be maintained at Reg.office & shall be open to inspection by members & supply copy in manner stated in Sec-150 (members register)
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Section shall apply mutatis mutandis for transmission of shares & debentures. Public Co may appoint financial institution duly approved by SECP as transfer agent
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Directors shall not refuse unless transfer deed is defective or invalid Within 30 days of deposit of instrument of transfer notify defect/invalidity to transferee (if transferee is CDC: within 5 days) Applicant shall be entitled to relodge transfer deed after removal of defect/invalidity. AOA may impose any limitations & restrictions on this process for Private Co.
78
Notice of refusal to transfer
78A
Appeal against refusal for registration of transfer
Application for transfer may be made either by transferor or transferee Co shall not register a transfer unless proper instrument of transfer duly stamped and executed by transferor and transferee has been delivered to Co along with certificate. Where transfer deed is lost, destroyed or mutilated before lodgement, Application made by transferee bearing stamp required by instrument of transfer Transferee shall prove to directors that transfer deed lost/destroyed/mutilated Co may demand such indemnity as it may think fit before registering the transfer
Co shall within 30 days after the date on which instrument of transfer was lodged with Co, send to transferee notice of the refusal + reasons for refusal. -
Transferor/Transferee/Successor in interest may appeal to SECP against any refusal to register transfer/transmission or against any failure to send notice of refusal u/s 78 Appeal to SECP may be preferred within 2 month of receipt of notice of refusal (if notice of refusal given) 2 month of expiry of 30 days u/s 78 (if no notice of refusal given).
SECP Order - SECP shall, give reasonable notice + opportunity to make representation to Co and Transferor/ Transferee/ Successor in interest
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section -
79
Transfer to successor-in-interest
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80
Transfer to nominee of deceased member
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SECP may direct Co to register the transfer or transmission or that it need not be registered (Co shall give notice of the decision within 15 days of receipt of order) Before making order, SECP may require Co to disclose the reasons for refusal. SECP may give such incidental & consequential directions as to payment of costs or otherwise as it deems fit. Nominee or successor shall made an application duly supported by document evidencing nomination or lawful award of relevant property to him Nominee or successor shall be entered as a member Co may ask for a suitable indemnity before transfer A person may at any time after becoming shareholder deposit with Co a nomination specifying person(s) right to become shareholder in the event of his death If shareholder nominates more than 1 person, he shall specify the extent of right of each nominee (if no of shares are possible of ascertainment in whole numbers) Nominee shall on death of shareholder, become entitled, to become shareholder and all rights of original member shall be passed to the nominee On receipt of proof of the death of shareholder along with the relevant scripts, said shares shall be registered in favour of nominee unless such nomination Was replaced by another nomination deposited by same member before death; or Was expressly cancelled by notice in writing to Co by same member; or Becomes invalid by reason of some contingency specified therein; or Becomes void by death of nominee before the member Nominee can only be one of these relatives (spouse, father/mother, brother/sister and son/daughter, including step/adopted child.)
Nomination would not restrict shareholder dealing in ordinary course with such shares before his death.
81
Transfer by a nominee of legal representative
Transfer of shares of debentures by a nominee shall be valid as if he had been a member at the time of execution of the instrument of transfer.
COMMISSION, DISCOUNT, PREMIUM AND REDEEMABLE PREFERENCES SHARES 82
Power to pay certain commissions, and prohibition of payment of other commissions, discounts, etc.
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Co may pay commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in or debentures of Co if Commission is authorised by AOA; Rate of commission shall not exceed the rate fixed by SECP Rate of commission shall be disclosed in Prospectus, Statement in lieu of prospectus, circular or notice whichever applicable No of shares or debentures which persons have agreed for a commission to subscribe absolutely is disclosed No allotment of shares/debentures or related commission/discount/allowance to any person subscribing/agreeing to subscribe in contravention of sec 82 & 84. Whether its forming part of purchase money of any property or contract price of any services acquired by Co, or money paid out of nominal purchase money or contract price, or otherwise.
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83
Application of premium received on issue of shares
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84
Power to issue shares at discount
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Brokerage on shares shall not in any case exceed 1% of the sale price or shall not more than such other % as may from time to time be specified by SECP A vendor, promoter, or other person who receives payment in shares, debentures or money from Co shall have power to apply any part of the shares, debentures or money so received in payment of any commission. Premium shall be transferred to " share premium account" Provisions of this Ordinance for reduction of share capital shall apply as if “share premium account” were paid-up share capital of Co Share premium account may be applied by Co in writing off the preliminary expenses writing off commission paid or discount allowed on issue of shares/debentures redemption of any redeemable preference shares or debentures on preminum issuing fully paid bonus shares to members of Co Shares cannot be issued on discount within 1 year of commencement of business Discount must be authorised by resolution passed in general meeting of Co Resolution must specify maximum rate of discount After passing resolution Co may apply to SECP for an order sanctioning the issue SECP may make an order sanctioning issue on such terms & conditions as think fit. Shares to be issued within 60 days after sanctioning by SECP or within such extended time as SECP may allow Issue of shares at a discount shall not be deemed to be reduction of capital. Every prospectus and every balance-sheet issued by Co subsequent to issue of shares shall contain particulars of discount allowed.
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Company Law (Quick Revision) Notes
Sec
85
Section Title Redemption of preference shares
Quick Revision of the Section Co Ltd by shares may redeem preference shares issued by it under following conditions - Shares shall not be redeemed unless they are fully paid - Shares shall be redeemed out of Distributable profits of Co; or Sinking fund created for this purpose; or Proceeds of a fresh issue of shares made for this purpose; or Sale proceeds of any property of Co; - When shares are redeemed otherwise than out of the proceeds of a fresh issue Amount applied in redeeming the shares shall be transferred from distributable profits to “capital redemption reserve fund” Provisions of this Ordinance shall apply as if “capital redemption reserve fund” were paid-up share capital of Co. - When shares redeemed out of proceeds of fresh issue; Premium, if any, must have been provided out of share premium account or distributable profits of Co before redemption - Redemption shall not be deemed as reduction of Authorised share capital. - AOA may impose any terms & manner on redemption of preference shares
FURTHER ISSUE OF CAPITAL 86
Further issue of capital
Where directors decide to increase capital of co by issuing further shares - Shares shall be offered to members in exact proportion to existing shares held by them - Offer shall be made by notice specifying No of shares to which the member is entitled with a time limitation within which offer(if not accepted) will be deemed to be declined - Fractional shares shall not be offered and all fractions less than a share shall be consolidated and disposed of by Co and proceeds shall be paid to willing shareholders. - If whole/part of shares offered is declined/not subscribed, directors may allot and issue such shares in such manner as they may deem fit Circular alongwith offer: - Offer of new shares shall be accompanied by circular duly signed by directors/authorised officer of Co in prescribed form containing material information about affairs of Co + latest statement of accounts + necessity for issue of further capital. - Copy of circular shall be filed with registrar before sending to shareholders. - It shall specify a date by which offer (if not accepted) will be deemed to be declined. Exceptions - Federal Government may, on an application made by any Public Co on basis of a special resolution passed by it, allow such Co to raise further capital without issue of right shares - Public Co may reserve certain percentage of further issue for its employees under “Employees Stock Option Scheme” to be approved by SECP (with prescribed rules)
87
Issue of shares in lieu of outstanding balance of any loans, etc.
Co may issue ordinary shares or grant option to convert 20% of outstanding balance of any loans, advances or credit, as defined in the Banking Companies Ordinance, 1962 or other noninterest bearing securities and obligations outstanding if following conditions are met: - Term of loan ≥ 3 years - Atleast 2 years have been passed from date of commencement of commercial production - In any 2 of preceding 3 years, return on such non interest bearing securities, obligations, loans, advances etc has fallen below minimum rate prescribed by SBP for those years.
REGULATION OF DEPOSITS 88
Deposits not to be invited without issuing and advertisement
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Federal Government may prescribe limits up to which, the manner in which and the conditions subject to which deposits may be invited, accepted or retained by a Co. No Co shall invite, or allow any person to invite, any deposit unless Deposit is invited or is caused to be invited in accordance with these rules; and An advertisement, including therein a statement showing financial position of Co, has been issued by Co in such form and in such manner as may be prescribed. Provisions of Ordinance for prospectus shall apply ‘mutatis mutandis’ to advertisement. Nothing contained in this section shall apply to a banking company, or such other class of companies as the Commission may specify in this behalf.
“Deposit” means any deposit of money with, and includes any amount borrowed by Co, but shall not include loan raised by issue of debentures or loan obtained from banking company or financial institution.
SHARE CAPITAL 89
Nature of shares and certificate of shares
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Talib e Doa : Atif Abidi
Shares/other interest of any member in Co shall be moveable property, transferable in manner provided by AOA. Each share in Co shall have a distinctive number. A certificate under common seal of Co specifying any shares held by any member shall be prima facie evidence of the title of the member to the shares.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
CLASSES AND KINDS OF SHARES 90
Classes and kinds of share capital
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Co limited by shares may have different kinds of share capital and classes as provided by its MOA & AOA: Different rights and privileges in relation to different classes of shares may only be conferred in such manner as may be prescribed
GENERAL PROVISIONS AS TO SHARE CAPITAL 91
Only fully paid shares to be issued
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No Co shall issue partly paid shares Where Co has partly paid shares on commencement of Ordinance, it shall Not issue further Share capital until all previous shares become fully paid up; and Pay dividend only in proportion to amount paid up on each share
92
Power of a company limited by shares to alter its share capital
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Co limited by shares, (if authorised by AOA), may alter conditions of MOA so as to Increase its share capital by such amount as it thinks expedient; Consolidate & divide whole or any part of its share capital into shares of larger amount than its existing shares; Sub-divide shares, or any of them, into smaller amount than fixed by MOA Cancel shares which have not been taken or agreed to be taken by any person as at the date of resolution for such, and diminish the amount of its share capital
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Rights attaching to new shares shall be same and strictly proportional to the rights attaching to previous shares so consolidated or sub-divided New shares issued shall rank pari passu with existing shares in all matters including right to bonus or right issue and dividend If authorised capital is fully subscribed, or unsubscribed capital is insufficient, it shall be deemed to have been increased to extent necessary for issue of shares to scheduled bank or financial institution in pursuance of any obligation of Co to issue shares to them (Notwithstanding anything contained in Ordinance/any other law/MOA/AOA) Powers under this section shall be exercisable by Co only in a general meeting. Co shall file with registrar notice of exercise of any power within 15 days from exercise
(shall not be deemed to be a reduction of share capital under this ordinance)
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93
Notice to registrar of consolidation of s/cap etc,
94
Notice of increase of share capital or of members
95
Prohibition of purchase or grant of financial assistance by a company for purchase of its own or its holding company’s shares
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If Co having Sh. capital has resolved to increase its sh. capital (u/s 92 or beyond authorised capital), and where Co not having Sh. capital has resolved to increase number of its members beyond the number previously registered - File with registrar, within 15 days after passing of resolution, a notice of the fact - Scheduled bank/fin.institution to whom shares issued may also file notice of increase Notice shall be deemed to have been filed by Co itself Co bound to reimburse fee properly paid to the registrar by them - Notice shall include particulars of shares to be affected and conditions thereof (if any) - Resolution shall not take effect unless notice give to registrar -
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95A
Power of a company to purchase its own shares
Talib e Doa : Atif Abidi
Where Co having a share capital has consolidated and divided its share capital into shares of larger amount than existing, it shall, within 15 days of such, file notice with registrar
No company shall have power to buy its own shares or shares of its holding Co: Exception for subsidiary Co: Allowed as acting trustee except holding Co beneficially interested under trust Can deal in shares of holding Co in ordinary course of business, if carries business of brokerage (Subsidiary Co shall not exercise voting rights attached to shares) Public Co (and private Co subsidiary of a public Co) shall not give (directly/indirectly) any financial assistance for purchase of own shares or holding Co’s shares by means of a loan, guarantee, provision of security or otherwise Co can advance or secure an advance to any of its salaried employees, including CE who, before his appointment was not a director (and excluding all directors) for purchase of shares of Co/Holding/Subsidiary if its a part of contract of service Nothing in this section shall prevent Co from redeeming any shares or any other redeemable security issued in accordance with provisions of Ordinance Listed Co from purchasing its own shares in accordance with 95A
Listed Co may (subject to provisions of 95A and regulations by SECP) purchase its own shares - Purchase shall be authorised by a Special Resolution which shall indicate Maximum number of shares to be purchased; Maximum price at which the shares may be purchased; and Period within which the purchase is to be made. - Notice of meeting shall contain explanatory statement containing material facts including justification for purchase; source of funding; effect on financial position of Co; and nature and extent of interest (if any) of every director directly/indirectly.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section -
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Purchase shall always be in cash and shall be out of the distributable profits. If purchased on premium, premium shall be charged to “Share Premium Account” If no premium account exists, charged to the distributable profits. Co shall have prescribed debt equity (75:25) and current ratios (1:1). Majority of directors including CE, shall at meeting make declaration of solvency verified by an affidavit that they have made a full inquiry into affairs of Co and have formed opinion that Co shall continue to operate as going concern and is capable of meeting its liabilities on time during period up to end of immediately succeeding financial year. Purchase shall be made through a tender system Mode of tender shall be decided by Co in general meeting through a special resolution. Shares purchased shall not be resold and shall be cancelled forthwith. Amount of Co’s paid up capital shall be diminished by nominal value of such shares Co shall maintain a register of shares so purchased and enter following particulars numbers of shares purchased; consideration paid for the shares purchased; mode of purchase; and date of cancellation of such shares. Declaration of solvency + Return about purchase of shares (containing such particulars as may be prescribed) shall be filed with SECP and registrar within 30 days of purchase
Capital Re-purchase Reserve Account - Nominal amount of shares cancelled shall be transferred from distributable profits to an account to be called “Capital Re-purchase Reserve Account” - If purchase at discount, the difference (discount) shall be credited to this reserve - For purpose of reduction of Co’s share capital; reserve deemed to be paidup capital of Co - Reserve may be applied in paying up its un-issued shares to be allotted to members of Co as fully paid bonus shares. _________________________________________________________________________________ Amendment in Section 95A was proposed through Companies (Amendment) Ordinance 2009 which was not approved by parliament within 120 days and was considered to be lapsed. Major changes proposed to 95A were Allowed for a listed company for cancellation of share or issuance of treasury stock in place of ord.cap Where retained as treasury stock, no voting rights, no cash dividend and no distribution in w/up. (Bonus shares and redemption allowed)
REDUCTION OF SHARE CAPITAL 96
Reduction of share capital
With court confirmation; Co Ltd by shares (if authorised by AOA), may by special resolution (Resolution for reducing share capital) reduce its share capital in any way, and may Extinguish / reduce liability on any of its shares not paid up Cancel any paid-up share capital which is lost or un-represented by available assets Pay off any paid-up share capital which is in excess of the needs of Co; If necessary, alter MOA by reducing amount of share capital and shares accordingly.
97
Application to court for confirming order
After passing special resolution (Resolution for reducing share capital).
98
Addition to name of a company of “and reduced”
99
Objection by creditors and settlement of list of objecting creditors
Entitled creditors: Entitled to any debt or claim on date fixed by the court if that date were the date of commencement of w/up; date will be fixed by the court for to be entered on the list of objecting creditors. * Court shall settle
100
Power to dispense with consent of the creditor on security being given for his debt
Where Co agrees to secure payment of his debt or claim. Full amount or amount fixed by court (where Co doesn’t admit his debt or claim).
101
Order confirming reduction
If Court is satisfied that either entitled creditor’s consent obtained or his debt / claim been discharged / determined / secured, the Court may make an order confirming the reduction
102
Registration of order and minute of reduction
103
Minute to form part of memorandum
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Add to its name until date as the Court may fix "and reduced” as last words Where reduction does not involve either the diminution of any liability for unpaid sh.cap, or payment to any shareholder of any paid-up share capital, the Court may, if it thinks expedient, dispense with the addition of the words ”and reduced”
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Order of court + Minutes approved by court confirming reduction of s/cap + description of altered s/cap + amount deemed to be paid on each share filed with registrar. Resolution for reducing share capital only effective if registered Notice of registration be published in manner directed by court Registrar shall issue certificate of registration of order & minutes as conclusive evidence
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Registered minute deemed to be substituted for corresponding part of MOA Shall be valid and alterable as if it had been originally incorporated in MOA Shall be embodied in each copy of MOA issued after registration.
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Company Law (Quick Revision) Notes
Sec
104
Section Title Liability of members in respect of reduced shares
Quick Revision of the Section -
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A member of Co, past or present, not be liable for amount reduced Except liability of creditor not met by Co; who (due to his ignorance) was not included in list made by court and, after reduction, Co is unable to pay his debt/claim (within meaning of winding up by court provisions of Ordinance); then Every person who was member of Co at date of registration of order + minute shall be liable to contribute ≤ amount he would have been liable to contribute for such debt/claim if Co had commenced winding up before registration date; and If Co is wound up; Court may,if thinks fit, on application (+ proof of ignorance) by creditor, settle list of persons liable to contribute, make & enforce calls & orders on those contributories as if they were ordinary contributories in winding up. Nothing in this section shall affect the rights of contributories among themselves
106
Publication of reasons for reduction
Court may (if Court thinks fit) require Co to publish in manner specified by Court; Reasons for reduction, or Such other information as Court may think expedient, and Causes which led to reduction
107
Increase and reduction of share capital in case of a company limited by guarantee having share capital
Co Ltd by guarantee (having share capital) if authorised by its articles, may increase or reduce its share capital in same manner and conditions to which a company limited by shares may increase or reduce its share capital under provisions of this Ordinance
VARIATION OF SHAREHOLDER'S RIGHTS 108
Variation of shareholders’ rights
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Variation of rights of shareholders of any class shall be only through Special Resolution. If alteration affects the rights/liabilities of members / class of members, it shall be carried out only by approval of 3/4th Majority of those. Not less than 10% of class of shareholders aggrieved by variation of their rights may, within 30 days of resolution, apply to Court for an order canceling the resolution Application made by one or more of their number (as they may authorise in writing) Court shall not pass such an order unless satisfied that Some facts which would have had a bearing on decision of the shareholders were withheld by Co in getting resolution passed or, Variation would unfairly prejudice shareholders of that class. Decision of the Court on any such application shall be final. Co shall, within 15 days of such order, forward copy of order to registrar. Variation includes abrogation, revocation or enhancement
REGISTRATION OF UNLIMITED COMPANY AS LIMITED 109
Registration of unlimited company as limited
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110
Power of unlimited company to provide for reserve share capital on re-registration
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Any unlimited Co may register as limited or Any Co already registered as a limited Co may re-register itself. Registration of unlimited company as limited company shall not affect rights, debts, liabilities, obligations or contracts before registration. Registrar shall close former registration and may dispense with delivery of copies of any documents with copies of which he was furnished at original registration Registration shall take place in same manner and have effect as if it were first registration of Co. Unlimited Co (having share capital) may, by its resolution for registration as a limited Co, increase nominal amount of its share capital by increasing nominal amount of each share Such increased amount shall not be called up except in case of winding up
UNLIMITED LIABILITY OF DIRECTORS 111
Limited company may have directors with unlimited liability
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In limited Co (if provided by MOA), liability of all directors/any one may, be unlimited. On the appointment / election of a director, Fact that his liability will be unlimited; Shall be disclosed in the proposal, Furthermore the promoters & officers shall give him a notice in writing that his liability will be unlimited (before he takes charge of his office).
112
Special resolution of unlimited company making liability of directors unlimited
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A limited Co (if authorised by AOA) may, by special resolution, alter its MOA to render the liability of its all directors/any one unlimited. Provisions shall be as valid as if they had been originally contained in MOA Alteration shall not apply, without the consent of present director.
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
SPECIAL PROVISIONS AS TO DEBENTURES 113
Right of debenture holder and share holder to have copies of trust deed
114
Debentures not to carry voting rights
A copy of any trust-deed for securing any issue of debentures shall be forwarded to every holder of any such debentures or shareholder of Co, at his request on payment of such fee as the Co may fix not exceeding amount prescribed -
No company shall issue any debentures carrying voting rights at any meeting of Co No debenture holder having voting rights before commencement of Ordinance shall exercise any such rights at any meeting of Co, except a meeting of debenture-holders
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Debentures convertible into ordinary shares may, at the option of Co, carry voting rights Such rights shall not be in excess of voting rights attached to ordinary shares of equal paid-up value
(Notwithstanding any-thing contained in Ordinance/MOA/AOA)
115
Perpetual debentures
116
Power to re-issue redeemed debentures in certain cases
A condition contained in any debenture or any deed for securing any debentures, shall not be invalid by reason only that thereby debentures are made irredeemable or redeemable only on happening of a contingency(however remote) or on expiration of a period (however long). -
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Where Co has redeemed any debentures previously issued, Co always shall have power to Keep the debentures alive for purposes of reissue; and Reissue debentures by reissuing same or by issuing other debentures in their place Upon reissue new debenture holder shall always have same rights & priorities Where debentures have been transferred to nominee of Co for keeping debentures alive; A transfer from that nominee shall be deemed to be reissue of debenture If Co has deposited any of its debentures to secure advances on current account balances Debentures shall not be deemed to be redeemed by reason only if account of Co becomes favorable (while debentures remained deposited) Re-issue of a debenture shall be treated as issue of new debenture for purposes of stamp duty & registration, Not be so treated for provisions limiting amount or No of debentures to be issued Debenture holder may assume that stamp duty has been duly paid by Co, unless he had notice, that debenture was not duly stamped, In such case Co shall be liable to pay the proper stamp-duty and penalty.
Sect not applied if AOA or conditions of issue expressly otherwise provide, or debentures been redeemed due to any obligation on Co, not being obligation enforceable by new debenture holder or his assigns.
117
Specific performance of contract to subscribe for debentures
118
Payment of certain debts out of assets subject to floating charge in priority to claims under charge
May be enforced in court for specific performance (take up and pay for debentures).
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119
Powers and liabilities of trustee
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Talib e Doa : Atif Abidi
Where either a receiver is appointed on behalf of debenture holders secured by a floating charge, or possession is taken by these debenture holders of any property comprised in or subject to charge, then, (if Co is not at the time in course of being wound up) Debts which in every winding up requires preferential payments shall be paid forthwith out of any assets coming to hands of receiver/person taking possession Time periods mentioned in those (preferential payments) provisions of ordinance shall be reckoned from date of appointment of receiver/possession being taken. Any payments made shall be recouped, as far as may be, out of assets of Co available for payment of general creditors Trust is formed for securing an issue of debentures under trust deed Trustee nominated or appointed under trust-deed (if empowered by deed) shall have right to sue for all redemption monies and interest in following cases: Co as mortgagor binds himself to repay debenture loan or pay accrued interest, or both, in the manner provided on the due date; Mortgaged property is wholly or partially destroyed or security is rendered insufficient (other than wrongful act or default of issuer) and trustee has given Co a reasonable opportunity of providing further security adequate to render whole security sufficient and Co has failed to do so; Trustee is deprived of whole or part of security by wrongful act / default of Co Trustee entitled to take possession of property and same not provided by Co Where a suit is brought, the Court may at its discretion stay the suit and all proceedings therein, until the trustee has exhausted all his available remedies against mortgaged property unless trustee abandons his security and, if necessary, retransfers property. Trustee or any person acting on his behalf (if authorised by trust-deed) shall sell, without intervention of Court, mortgaged property or any part thereof in default of repayment schedule of Principal or interest on the due date by Co. Any provision contained in a trust-deed/any contract exempting a trustee from or indemnifying him against, liability for breach of trust shall be void. Except
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
120
Issue of securities and redeemable capital not based on interest
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Any release validly given for anything done/omitted before giving release; or Any provision enabling such a release to be given On agreement of a majority of ≥ 3/4th debenture-holders present in person or by proxy (if permitted) at a meeting summoned for this purpose; and With respect to specific acts/omissions/trustee dying or ceasing to act.
A Co may issue any instrument, in nature of redeemable capital in consideration of any funds, moneys or accommodations (whether in cash or specie) or against any promise, guarantee, undertaking or indemnity issued in favour of Co, to One or more scheduled banks, Financial institutions or Such other persons as specified by FG by notification in official Gazette Such agreement may include (in addition to others) all or any of following matters Mode and basis of repayment by Co within a certain time period; Arrangement for sharing of profit and loss; Creation of "participation reserve” by Co in manner provided in agreement for issue of participatory redeemable capital in which all financers shall participate for interim & final adjustment on maturity in accordance with terms & conditions If net loss on maturity; Right of holders to convert outstanding balance of capital/ part into ordinary shares of Co at break-up price calculated in prescribed manner. Terms & conditions for issue of such instruments not be challenged by Co/Shareholders (Provisions of Ord for creation/issue/increase/decrease of capital not apply to redeemable capital)
REGISTRATION OF MORTGAGES, CHARGES, ETC. 121
Certain mortgages and charges to be void if not registered
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Following mortgages/charges/other interests created by Co shall be registered by filing its instrument + Particulars with registrar in prescribed manner within 21 days after its creation, mortgage or charge for purpose of securing any issue of debentures; or mortgage or charge on uncalled share capital of Co; or mortgage or charge on any immovable property wherever situate, or any interest therein; or mortgage or charge on any book debts of the company; or mortgage or charge, not being a pledge, on any movable property of Co; or floating charge on undertaking or property of Co, including stock-in-trade; or mortgage or charge on a ship or any share in a ship; or mortgage or charge on goodwill, on a patent or licence under a patent, on a trade mark, or on a copyright or a licence under a copyright; or mortgage or charge or other interest based on agreement for the issue of any instrument in the nature of redeemable capital; or mortgage or charge or other interest based on a musharika agreement; or mortgage or charge or other interest based on a hire-purchase or leasing agreement for acquisition of fixed assets; If not registered it shall becomes void against the liquidator and any creditor of Co and the money secured shall immediately become payable Mortgage/charge created outside Pakistan comprising property situate outside Pakistan, Register within 21 days after date on which instrument or copy could, in due course of post, and if dispatched with due diligence, have been received in Pakistan For mortgage/charge created in Pakistan but comprises property outside Pakistan, Shall be registered notwithstanding that further proceedings may be necessary to make it valid or effectual according to law of that country Where a negotiable instrument has been given to secure the payment of any book debts, Deposit of instrument to Co shall not be treated as a mortgage/charge on those debts Holding of debentures entitling the holder to a charge on immovable property shall not be deemed to be an interest in immovable property. Where any mortgage/charge is registered; any person acquiring such property/any part /any share or interest therein, shall be deemed to have notice of mortgage/charge
> Copy of every instrument or deed creating or evidencing any charge required to be registered shall be verified by Affidavit of a responsible officer that these are true copies; or by a certification of public officer having custody of original document. (If instrument/deed relates to property situate in Pakistan) Affidavit of a responsible officer of Co, or of person interested in mortgage or charge on behalf of any person other than Co, stating it as a true copy (Where it relates solely to property outside Pakistan)
122
Registration of charges on properties subject to charge
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Talib e Doa : Atif Abidi
Where Co acquires property (subject to a charge u/s 121 and charge not registered), the Co shall get it register within 21 days after date of acquisition If Mortgage/charge created outside Pakistan comprising property outside Pakistan, Register within 21 days after date on which instrument or copy could, in due course of post, and if dispatched with due diligence, have been received in Pakistan
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Company Law (Quick Revision) Notes
Sec
123
Section Title Particulars in case of series of debentures entitling holders pari passu
Quick Revision of the Section -
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File with registrar within 21 days after execution of deed containing charge or execution of any debentures of the series (if there is no such deed) following particulars + copy of deed verified in prescribed manner,or one of the debentures of series (if no such deed): total amount secured by whole series; dates of resolutions authorizing issue of the series and date of the covering deed, if any, by which the security is created or defined; a general description of the property charged; and names of the trustees, if any, for the debenture-holders; Registrar shall, on payment of prescribed fee, enter those particulars in register: Where more than one issue is made of debentures in series, there shall be filed with registrar for entry in register particulars of date and amount of each issue, (Omission to do this shall not affect validity of debentures issued)
124
Particulars in case of commission, etc. on debentures
Where any commission, allowance or discount has been paid/made (directly/indirectly) by Co to any person for subscribing/agreeing to subscribe (absolutely/conditionally) for debentures of Co, or procuring/agreeing to procure subscriptions - Particulars filed with registrar shall include amount or % of commission/discount (Omission to do this shall not affect validity of debentures issued) - Deposit of debentures as security for any debt of Co not be treated as issue at discount
125
Register of mortgages and charges
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126
Index to register
127
Certificate of registration
Registrar shall keep a chronological index, in prescribed form and particulars -
128
Registrar shall keep, with respect to each Co, a register in prescribed form of all mortgages and charges created by Co required to be registered u/s 121 or 122 Shall, on payment of prescribed fee, enter in register for every such mortgage/charge, Date of creation, Amount secured by it, Short particulars of the property mortgaged or charged, and Names of the mortgagees or persons entitled to the charge. Register shall be open to inspection by any person on payment of the prescribed fee.
Registrar shall give certificate of registration of any mortgage/charge registered stating the amount secured, Certificate shall be conclusive evidence that requirements of Ordinance complied with.
Endorsement of certificate of registration on debenture of certificate of debenture stock
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129
Duty of company and right of interested party as regard registration
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Prime responsibility of registration with registrar is on Co However registration may be effected on application of any person interested therein. Such person entitled to recover from Co the amount of any fees properly paid by him On any modification is such mortgage or charge are modified, it is duty of Co to send registrar particulars of such modification + copy of instrument evidencing modification
130
Copy of instrument creating mortgage or charge to be kept at registered office
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Co shall keep at Reg. office a copy of instrument creating or modifying mortgage/charge For series of uniform debentures, a copy of one such debenture shall be sufficient.
131
Rectification of register of mortgages
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SECP may (on application of Co/interested person) on terms and conditions seem just and expedient, order for extension in time of registration if satisfied that omission to register a mortgage/charge within 21 days, or omission or mis-statement of any particular, or omission to give intimation to registrar of payment or satisfaction was accidental or due to inadvertence or to some other sufficient cause, or is not prejudicial to creditors/shareholders, or any other grounds just and equitable Certified copy of order of SECP shall be filed with registrar within 21 days of such order Extension in time shall not prejudice any rights acquired in respect of property concerned prior to the time when the mortgage or charge is actually registered.
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132
133
Registration of payment or satisfaction of mortgages and charges
Power of registrar to make entries of satisfaction and release in absence of intimation from Co
Talib e Doa : Atif Abidi
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Co shall cause a copy of every certificate of registration to be endorsed on every debenture or certificate of debenture stock which is issued by Co and is secured by it: Co not required endorsing on instruments issued before mortgage or charge was created.
Duty of Co to give intimation to registrar of payment/satisfaction, in full, of any charge or mortgage registered with registrar within 21 days from date of payment /satisfaction, Registrar shall then sent notice to holder of charge/mortgage to show cause, within fixed time ≤ 14 days, why payment or satisfaction of charge/mortgage should not be recorded If no cause shown; Registrar shall order that a memorandum of satisfaction be entered in register and shall furnish Co with a copy (if required by it) If cause is shown; Registrar shall record a note to that effect in register, and shall inform Co about it
Registrar may,if satisfied by evidence,(without intimation by Co) make entries in register that Debt has been paid or satisfied in whole or in part, or Part of the property or undertaking charged has been released from charge or has ceased to form part of Co's property or undertaking
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Company Law (Quick Revision) Notes
Sec
Section Title
Quick Revision of the Section
135
Company’s register of mortgages
Every Co shall keep a register of mortgages and enter therein all mortgages and charges specifically affecting property of Co and all floating charges on Co/ Its property Short description of the property mortgaged or charged, Amount of mortgage or charge and, Names of mortgagees or persons entitled (except securities to bearer)
136
Right to inspect copies of instruments creating mortgages and charges and company’s register of mortgages
Copies u/s 130 and register of mortgages & charges u/s 135 shall be open to inspection of any - Creditor/member of Co without fee (at all reasonable times) - Other person on payment of such fee as Co may fix, not exceeding amount prescribed
Talib e Doa : Atif Abidi
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Company Law (Quick Revision) Notes
Definitions in Companies Ordinance 1984
“Annexure 1” Important Definitions
2
Associated companies" and "associated undertakings"
Two or more companies or undertakings, or a company and an undertaking, interconnected with each other in the following manner - if a person who is the owner or a partner or director of a company or undertaking, or who, directly or indirectly, holds or controls shares carrying not less than twenty per cent of the voting power in such company or undertaking, is also the owner or partner or director of another company or undertaking, or, directly or indirectly, holds or controls shares carrying not less than twenty per cent of the voting power in that company or undertaking; or - if the companies or undertakings are under common management or control or one is the subsidiary of another; or - if the undertaking is a modaraba managed by the company; A person who is owner of or a partner or director in a company or undertaking or, who so holds or controls shares carrying not less than 10% of voting power in a company or undertaking, shall be deemed to be an "associated person" of every such other person and of person who is owner of or a partner or director in such other company or undertaking,or who so holds or controls such shares in such other company or undertaking Provided that shares shall be deemed to be owned, held or controlled by a person if they are owned, held or controlled by that person or by the spouse or minor children of the person: Provided further that— - directorship of a person or persons by virtue of nomination by the Federal Government or a Provincial Government or a financial institution directly or indirectly owned or controlled by such Government; or - shares owned by the National Investment Trust or the Investment Corporation of Pakistan or a financial institution directly or indirectly owned or controlled by the Federal Government or a Provincial Government or shares registered in the name of a central depository, where such shares are beneficially owned by central depository; shall not be taken into account for determining the status of a company, undertaking or person as associated company, associated undertaking or associated person
4
"body corporate" or "corporation"
Includes a company incorporated outside Pakistan, but does not include— - a corporation sole; or - a co-operative society registered under any law relating to the registration of co-operative societies; or - any other body corporate, not being a company as defined in this Ordinance, which the Federal Government may, by notification in the official Gazette, specify in this behalf
5
“book and paper”, “book or paper” or "books of account"
Include accounts, deeds, vouchers, writings and documents, maintained on paper or computer network, floppy, diskette, magnetic cartridge tape, CD-Rom or any other computer readable media
6
Chief executive
In relation to a company means an individual who, subject to the control and directions of the directors, is entrusted with the whole, or substantially the whole, of the powers of management of the affairs of the company, and includes a director or any other person occupying the position of a chief executive, by whatever name called, and whether under a contract of service or otherwise
12
Debenture
Includes debenture stock, bonds, term finance certificates and any other securities, other than a share, of a company, whether constituting a charge on the assets of the company or not
14
Document
Includes summons, notice, requisition, order, other legal process, voucher and register whether issued, sent or kept in pursuance of this Ordinance or any other law for the time being in force, whether maintained in any medium capable of being retrieved by any electronic means or in any other manner
15 A
Financial institution
Includes,— - a company or an institution whether established under any special enactment and operating within or outside Pakistan which transacts the business of banking or any associated or ancillary business through its branches; - a modaraba, leasing company, investment bank, venture capital company, financing company, housing finance company, a nonbanking finance company; and - such other institution or companies authorised by law to undertake any similar business, as the Federal Government may, by notification in the official Gazette, specify for the purpose
16
Financial year
In relation to any body corporate, means the period in respect of which any profit and loss account or the income and expenditure account, as the case may be, of the body corporate, laid before it in general meeting, is made up, whether that period is a year or not
19
Listed
In relation to securities, means securities which have been allowed to be traded on a stock exchange
21
Member
In relation to a company having share capital, a subscriber to the memorandum of the company and every person to whom is allotted, or who becomes the holder of, any share, scrip or other security which gives him a voting right in the company and whose name is entered in the register of members, and, in relation to a company not having a share capital, any person who has agreed to become a member of the company and whose name is so entered
Page 1 of 3
Definitions in Companies Ordinance 1984
“Annexure 1”
28
Private company
A company which, by its articles,— - restricts the right to transfer its shares, if any; - limits the number of its members to fifty not including persons who are in the employment of the company; and - prohibits any invitation to the public to subscribe for the shares, if any, or debentures of the company: Provided that, where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member
29
Prospectus
Any document described or issued as prospectus, and includes any notice, circular, advertisement, or other communication, inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate, or inviting deposits from the public, other than deposits invited by a banking company or a financial institution approved by the Federal Government, whether described as prospectus or otherwise
30 A
Redeemable capital
Includes finance obtained on the basis of participation term certificate (PTC), musharika certificate, term finance certificate (TFC), or any other security or obligation not based on interest, other than an ordinary share of a company, representing an instrument or a certificate of specified denomination, called the face value or nominal value, evidencing investment of the holder in the capital of the company on terms and conditions of the agreement for the issue of such instrument or certificate or such other certificate or instrument as the Federal Government may, by notification in the official Gazette, specify for the purpose
30 B
Register
Register of members of a company and includes the register of debenture-holders or holders of other securities maintained on paper or computer network, floppy, diskette, magnetic cartridge tape, CD-Rom or any other computer readable media
34
Security
Any share, scrip, debenture, participation term certificate, modaraba certificate, musharika certificate, term finance certificate, bond, pre-organization certificate or such other instrument as the Federal Government may, by notification in the official Gazette, specify for the purpose
36
Special resolution
A resolution which has been passed by a majority of not less than three-fourths of such members entitled to vote as are present in person or by proxy at a general meeting of which not less than twenty-one days notice specifying the intention to propose the resolution as a special resolution has been duly given: Provided that, if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less then twenty-one days notice has been given
Other Definitions
8
Company limited by shares
A company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them
9
Company limited by guarantee
A company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its winding up
13
Director
Includes any person occupying the position of a director, by whatever name called
20
Listed company
A company or a body corporate or other body whose securities are listed
24
Officer
Includes any director, chief executive, managing agent, secretary or other executive of the company, howsoever designated, but, save in sections 205, 220 to 224, 260, 261, 268, 351, 352, 412, 417, 418, 474 and 482, does not include an auditor
25
Participatory redeemable capital
Such redeemable capital as is entitled to participate in the profit and loss of a company
26
Prescribed
-
-
as respects the provisions of this Ordinance relating to the winding up of companies and other matters requiring to be determined or decided by the Court, prescribed by rules made by the Supreme Court in consultation with the High Courts or, where the Supreme Court advises the Federal Government to do so, by the Federal Government in consultation with the High Courts; and as respects the other provisions of this Ordinance, prescribed by rules or regulations made by the Federal Government or the Commission as the case may be after previous publication in the official Gazette
31
Registrar
A registrar, an additional registrar, a joint registrar, a deputy registrar or an assistant registrar, performing under this Ordinance the duty of registration of companies
33
Secretary
Any individual appointed to perform the secretarial, administrative or other duties ordinarily performed by the secretary of a company
Page 2 of 3
Definitions in Companies Ordinance 1984
“Annexure 1” Referential Definitions
1
Articles
3
Deleted
Articles of association of a company as originally framed or as altered in accordance with the provisions of any previous Companies Act, or of this Ordinance, including, so far as they apply to the company, the regulations contained in Table A in the First Schedule
5A
Central depository
A central depository as defined in clause (cc) of section 2 of the Securities and Exchange Ordinance, 1969 (XVII of 1969), and registered with the Commission under section 32A of that Ordinance
6A
Commission
Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997)
7
Company
Company formed and registered under this Ordinance or an existing company
10
Deleted
11
The Court
The court having jurisdiction under this Ordinance
15
Existing company
A company formed and registered under any previous Companies Act
17
Form
A form set out in any of the schedules or prescribed
18
Holding company
A holding company as defined in section 3
22
Memorandum
Memorandum of association of a company as originally framed or as altered from time to time in pursuance of the provisions of any previous Companies Act or of this Ordinance
23
"modaraba" and "modaraba company"
Have the same meaning as in the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980)
27
Previous Companies Act
Includes any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (X of 1866), or the Acts repealed thereby, the Indian Companies Act, 1866 (X of 1866), the Indian Companies Act, 1882 (VI of 1882), the Indian Companies Act, 1913 (VII of 1913), or any law corresponding to any of those Acts and in force in any of the territories now constituting Pakistan before the extension of the Companies Act, 1913 (VII of 1913), to such territories
30
Public company
A company which is not a private company
32
Scheduled bank
Has the same meaning as in the State Bank of Pakistan Act, 1956 (XXXIII of 1956)
35
Share
Share in the share capital of a company
37
Stock exchange
A stock exchange registered under the Securities and Exchange Ordinance, 1969 (XVII of 1969);
38
Subsidiary company" or "subsidiary
A subsidiary company as defined in section 3
39
Table A
Table A in the First Schedule
Page 3 of 3
SECP Act 1997 – Schedule
“Annexure 2”
POWERS AND FUNCTIONS CONFERRED ON THE AUTHORITY UNDER THE ORDINANCE TO BE EXERCISED BY THE COMMISSION
Description of Power and Function
Section #
1. To call for any information, document etc. for purposes of any proceeding or inquiry
12(4)
2. To allow alteration in the Memorandum of Association
21
3. To decide whether a name of a company is appropriate and permissible
37
4. To grant licence to an association not for profit to be registered as a company
42
5. To accord approval for conversion of a public company into a private company
44
6. Approval of prospectus
57
7. To allow issue of securities outside Pakistan
62A
8. To specify minimum amount of shares to be applied for and the form of application for shares
67
9. To prescribe maximum rate of commission on issue of shares
82
10. To sanction issue of shares at discount
84
11. To grant extension in time for holding AGM in the case of listed companies
158
12. To allow a company to make a loan to a director
195
13. To grant exemption for appointment of managing agent and to approve appointment of sole sale/purchase/distribution agents
206
14. To recover tenderable gains
224
15. To prescribe cost accounting records for manufacturing companies
230
16. To extend period for laying annual accounts in the AGM by listed companies
233
17. To direct a change in financial year of holding companies and their subsidiaries
238
18. To call for additional statements of accounts from companies
246
19. To appoint auditors in certain cases
252
-
-
-
-
-
-
-
-
-
-
-
-
-
20. To conduct investigation into the affairs of the companies
263 and 265
21. To prosecute a company or person found guilty as a consequence of investigation
270 and 271
22. To appoint administrator
295
23. To make application to the Court for winding up a company
309
24. To recommend a panel of persons to the Court for appointment as official liquidator
321
25. To order restoration of the names of defunct companies
439(9)
26. To exercise similar powers in the case of foreign companies
457
27. To accord special permission to take over original documents from custody of Registrar
467
28. To prescribe additional fees for filing of documents
469
29. To force companies to comply with the provisions
472
30. To impose fine as penalty
476
31. To hear appeals against the orders of Registrar
477
32. To exercise powers of court in relation to enquiries and proceedings
478
33. To direct appearance of officers of companies
479
34. To apply amount of fine towards payments of costs, compensations, etc.
483
35. To hear revision petition against the orders of Registrar, etc.
484
36. To grant relief in certain cases
488
37. To impose penalty for wrongful withholding of company profit
493
38. To impose penalty for non-compliance with directions
495
